Financing sustainable development? The role of foreign aid in Southeast Asia's energy transition

Abstract

The rapid deployment of modern renewable energy generation capacity in the fastgrowing Southeast Asian region will be crucial to ensure that the region can meet its increasing future energy demand in a sustainable way. However, many countries will need assistance through international cooperation and foreign aid to develop their sustainable energy sources. The three East Asian donor states Japan, South Korea and China are particularly crucial because they account for a large share of aid disbursement to the region and serve as development role models for many recipient countries. All three states are signatories of the Paris Agreement and the 2030 Agenda for Sustainable Development and thus committed to the global goals of climate protection and sustainable energy development. This paper is based on an analysis of official aid databases and second-party data to explore the details of the energy-related aid contributions of the three key donor states to Southeast Asia during the last 15 years. The findings indicate that all three states contradicted their own international pledges by financing fossil-fuel power generation projects in many countries in the region. Although recent policy changes in Japan and South Korea are cause for optimism, the opacity of China's energy-related aid flows combined with its renewed support for domestic coal power generation are worrying signs for the future of energy development in Southeast Asia and beyond.

Financial stability and sustainable development

“…Existing studies show that finance play a key role in achieving the sustainable development goals because financial institutions can provide credit and other tailored financial services, such as green loans and green investment to fund the realization of the sustainable development goals (Barua, 2020; Bertheau & Lindner, 2022; Ozili, 2021). But for this to happen, there is a need to safeguard the financing of sustainable development by ensuring there is a stable financial system (Bordon & Schmitz, 2015).…”

Success factors of global goal‐setting for sustainable development: Learning from the Millennium Development Goals

“…Least developed countries will otherwise not be in a position to adopt adequate measures to implement the SDGs in their jurisdictions (Fukuda‐Parr & Hegstad, 2018). A strengthened global funding initiative for these countries could leverage new public and private resources for sustainable development and overcome or mitigate their highest vulnerability (Bertheau & Lindner, 2022; Doumbia & Lauridsen, 2019; Hurley & Voituriez, 2016).…”

Donor motivation in the era of the COVID-19 crisis: Focusing on South Korean health diplomacy and response aid to COVID-19

“…In other words, aid has been distributed where it can be seen as most effective instead of where it is most needed, conflating its effectiveness and intention. Moreover, the fact that those with international pledges of support for the sustainable development goals (SDGs) agenda are funding fossil fuel power generation projects in many South Asian countries rather than financing renewable energy projects ( Bertheau and Lindner 2022 ) suggests that donors’ aid contributions may have ulterior motives. Although evidence in this regard hints at the possibility that aid may not be entirely motivated by needs-based logic, because of the purpose of the ABC program and previous findings supporting the needs-based argument, the following hypothesis may be worth testing: Hypothesis 1: Countries lacking the equipment and capability needed to tackle COVID-19 tend to receive higher amounts of ODA from South Korea's ABC program.…”