Prime Infra CEO: Paris 1.5-Degree Goal Feasible for Southeast Asia if Governments Are Willing to Pay | Fortune

Climate target comes with costs

The Paris Agreement calls on countries to keep global average temperature increases well below 2°C above preindustrial levels and pursue efforts to limit warming to 1.5°C. Lucci said governments in the region would face a difficult choice between higher costs with decarbonization and reconsidering targets.

Philippines faces energy constraints

Prime Infrastructure Capital is based in the Philippines, which imports 98% of its oil from the Middle East. The country declared a nationwide energy emergency in March, and local fuel prices rose.

Lucci said the Philippines’ grid is not equipped to receive large amounts of variable energy. He said the company is building 2,000 megawatts of pumped hydro to help stabilize the grid.

Investment needs investor confidence

Kim-See Lim, chief investment officer of the Asian Infrastructure Investment Bank, offered a more optimistic view, citing Southeast Asia’s young, tech-savvy population and growth over the past two decades. She said climate change’s effects are felt severely in the region, making an energy transition necessary.

Lim said investors still expect minimum returns in emerging markets, but perceived project risks remain too high. In her view, capital is available; the shortage is confidence in projects that can attract financing.

Demand rises as energy risks persist

The International Energy Agency projects Southeast Asian electricity demand will grow by 5.4% annually from 2026 to 2030. Data centers are adding pressure: global data-center electricity use reached an estimated 415 terawatt hours in 2024, about 1.5% of global consumption, and the IEA says AI is speeding the deployment of high-performance servers.

The IEA estimates that 25% of global seaborne oil trade passed through the Strait of Hormuz in 2025, with about 80% of the oil and oil products carried through it destined for Asia. Lim said liquefied natural gas prices remained double their earlier level and oil prices were close to double after the Middle East disruption.

Xingjian Pang, Schneider Electric’s East Asia president, said some data centers may need to be located far from communities in energy parks. He said facilities near communities could prompt protests over their use of electricity and water.