APAC Energy Pulse – March 2025

Since our last update, various initiatives and developments across the Asia-Pacific market seem to support the prospect of future growth.

In this issue of APAC Energy Pulse, we take a closer look at some of these initiatives and developments:

• Singapore expected to buy its first tranche of carbon credits in 2025
• Indonesia’s new sovereign wealth fund
• New regulation broadens the scope of carbon capture and storage in Indonesia
• New export proceeds requirement
• 495MW Fengmiao 1 offshore windfarm in Taiwan reaches financial close
• Malaysia passes Carbon Capture, Utilization and Storage Bill 2025
• Malaysia enforces energy efficiency laws
• The Philippines Department of Energy opens Green Energy Auction 4
• Thailand introduces first green electricity tariff
• Vietnam's new decree on renewable energy development and incentives

In More Detail: Energy Transition Updates from the Asia-Pacific Region

SINGAPORE

1. Singapore expected to buy its first tranche of carbon credits in 2025

What happened?

At the parliamentary budget debate on March 6, 2025, Singapore's Minister for Manpower and Second Minister for Trade and Industry, Tan See Leng, announced that Singapore has signed carbon credit transfer agreements with three countries (Bhutan, Papua New Guinea and Ghana) to fulfill its Nationally Determined Contributions under the Paris Agreement.

These agreements set the stage for Singapore to eventually buy carbon credits from projects in these countries to meet its climate targets. Although Singapore has not yet purchased any carbon credits to offset emissions, it has been actively preparing to do so. These agreements are expected to be implemented as early as 2025, with plans to purchase the first batch of carbon credits in compliance with the Paris Agreement.

Why does it matter?

Buying credits from other countries will provide Singapore with alternative ways to reduce its carbon footprint and help achieve its goal of reducing emissions to between 45Mt and 50Mt by 2035, down from 60Mt in 2030.

INDONESIA

1. Indonesia’s new sovereign wealth fund

What happened?

Indonesia has launched a new sovereign wealth fund called the “Lembaga Pengelola Investasi Daya Anagata Nusantara” or the “Daya Anagata Nusantara Investment Management Agency” (Danantara).

Danantara was established under Law No. 1 of 2025 on the Third Amendment to Law No. 19 of 2003 on State-Owned Enterprises, which was enacted on February 24, 2025, and further regulated under Government Regulation No. 10 of 2025 on the Organisation and Governance of the Daya Anagata Nusantara Investment Management Agency (GR 10/2025).

Under GR 10/2025, Danantara reports directly to the president and includes a supervisory body, an implementing body and an advisory body. Members of these bodies will be appointed by the President. GR 10/2025 also states that the President may form an Oversight and Accountability Committee.

Danantara is designed to hold shares of all major state-owned enterprises (SOEs) in Indonesia, including PT Pertamina (Persero), which is Indonesia’s oil and gas SOE, PT Perusahaan Listrik Negara (Persero), which is Indonesia’s state power utility company, and PT Mineral Industri Indonesia (MIND ID), which oversees Indonesia’s mineral and mining sector.

Why does it matter?

Danantara represents a significant shift in how Indonesia manages its SOEs by consolidating their assets under one central holding entity. By streamlining management and oversight, the government seeks to enhance the performance of SOEs and create a more autonomous and efficient framework, making them more competitive and appealing to investors. This strategic move is expected to attract both domestic and foreign investment, driving economic growth and development in Indonesia.

In practical terms, Danantara is intended to pool resources from Indonesia's SOEs and direct them toward key strategic initiatives, including renewable energy, industrial development and food production. President Prabowo Subianto has announced that Danantara will oversee assets exceeding US$900 billion, with an initial funding goal set at US$20 billion. This ambitious plan aims to leverage the consolidated funds to drive significant advancements in critical sectors, positioning Indonesia as a leader in sustainable and industrial growth.

If managed successfully, Danantara can offer a streamlined and transparent platform for engaging with Indonesia's state-owned assets, providing opportunities for strategic partnerships and investments in a rapidly growing economy.

2. New regulation broadens the scope of carbon capture and storage in Indonesia

What happened?

In late December 2024, Indonesia's Minister of Energy and Mineral Resources (MEMR) introduced regulation No. 16 of 2024 on the Implementation of Carbon Storage Activities within a Carbon Storage Permit Area in Relation to Carbon Capture and Storage Activities (MEMR 16/2024).

MEMR 16/2024 provides a structured framework for non-production sharing contract (PSC) contractors to engage in carbon capture and storage outside traditional oil and gas work areas (Oil and Gas Work Areas).

The regulation complements an existing regulation on the implementation, capture and storage of carbon (CCS) as well as the capture, use and storage of carbon in the upstream oil and gas, namely MEMR Regulation No. 2 of 2023 on the Implementation, Capture, and Storage of Carbon as well as the Capture, Use, and Storage of Carbon within the Upstream Oil and Gas Business (MEMR 2/2023). Under MEMR 2/2023, CCS activities must take place within existing Oil and Gas Work Areas under a PSC.

MEMR 16/2024 offers a different framework from MEMR 2/2023 for designating an area to carry out CCS activities, which under MEMR 16/2024, is referred to as a carbon storage permit area (Permit Area). Parties that can carry out CCS activities are granted a license, called the Operations License (Operations License).

Why does it matter?

The new regulation highlights the government's commitment to broadening the scope of CCS initiatives. It also paves the way for a wider range of participants and allows for more varied structures in CCS projects.

For example, under the new regulation, assets purchased by the holder of an Operations License belong to the Operations License holder. This means Operations License holders can provide asset security to financiers of a CCS project developed under the MEMR 16/2024 scheme, as long as the assets are restricted by the Indonesian government’s loan arrangements with the World Bank's lending arm (the World Bank Negative Pledge or WBNP). This was not possible under MEMR 2/2023. Under MEMR 2/203, assets of the PSC contractors are owned by the state, which is typical since PSC contractors recover their costs from the state. Therefore, PSC contractors cannot provide asset security over their assets, and the government also cannot provide security over such assets due to the WBNP. These restrictions mean that project financing in the upstream oil and gas sector in Indonesia often uses highly structured mechanisms like the “trustee borrowing scheme” to obtain debt financing.

While there is significant improvement, the regulatory landscape remains complex, with distinct processes for PSC contractors and non-PSC entities. PSC contractors can integrate CCS into their existing operations relatively easily, but non-PSC entities must navigate a more intricate process involving auctions, tenders, and licensing.

3. New export proceeds requirement

What happened?

On February 17, 2025, Indonesia’s president issued Government Regulation No. 8 of 2025, amending Government Regulation No. 36 of 2023 on Export Proceeds from Activities Relating to the Business and Management and/or Processing of Natural Resources (GR 8/2025). GR 8/2025 became effective on March 1, 2025.

Under GR 8/2025, Indonesian exporters of certain natural resource products must retain 100% of their export proceeds in the Indonesian banking system for at least 12 months. Companies should consider how GR 8/2025 will impact their transactions once Bank Indonesia or the Minister of Finance (MOF) issues the relevant implementing regulations.

Why does it matter?

The requirement to retain proceeds within the Indonesian banking system is not new, as Bank Indonesia has mandated all exporters do so since 2012. However, previously, exporters, including those dealing in natural resources, could transfer 100% of their export proceeds to offshore accounts immediately after depositing them into an Indonesian account.

In 2023, the Indonesian government began requiring exporters of certain natural resources products to retain 30% of their export proceeds within the Indonesian banking system for three months. This affected companies exporting natural resources that had project financing arrangements, as lenders typically required that all proceeds be held in accounts outside of Indonesia. Consequently, many borrowers had to restructure their financing and account arrangements to comply with GR 36/2023.

If a company is considering any form of project finance, it may need to discuss with prospective lenders whether they can accept an onshore collection account and an onshore reserve account, if reserves are necessary. Since it is unclear whether the export proceeds can be used to immediately repay loans (or if such use is only limited to loans for capital goods), borrowers should also consider proposing a repayment schedule that accommodates delayed cash flow availability, ensuring that debt service obligations align with the eventual release of funds.

TAIWAN

1. 495MW Fengmiao 1 offshore windfarm in Taiwan reaches financial close

What happened?

Taiwan’s offshore wind sector made significant progress on March 19, 2025, when Copenhagen Infrastructure Partners’ (CIP) 495MW Fengmiao 1 project reached financial close, valued at approximately US$3.1 billion. 

Why does it matter?

This is the first project from the Round 3.1 auction process to achieve this milestone. It is also the first offshore wind project in the APAC region to reach financial close solely based on a multi-CPPA revenue stack, making it a truly non-subsidy project. The project includes offtake agreements with United Microelectronics Corporation, Sino-American Silicon Products Inc., Far EasTone Telecommunications Co., Ltd., MediaTek and two other offtakers. 

Orrick advised the ECAs and lenders on the project financing, having previously undertaken the same role for the Changfang and Xidao (CFXD) and Zhong Neng (ZN) projects in Taiwan. More details can be found here.

Additional Taiwanese offshore wind projects are expected to reach financial close in the coming 12 months, providing a boost to a sector that has faced challenges over the last few years.

MALAYSIA

1. Malaysia passes Carbon Capture, Utilization and Storage Bill 2025

What happened?

On March 6, 2025, Malaysia's Dewan Rakyat passed the Carbon Capture, Utilization, and Storage Bill 2025 (CCUS Bill) governing the capture, transport, utilization and storage of carbon dioxide activities in Peninsular Malaysia and Labuan. Specifically, the CCUS Bill:

• Outlines the responsibilities of storage site operators regarding environmental protection and risk management to ensure internationally compliant carbon capture, utilization and storage (CCUS) operations;
• Establishes a new 'Malaysia Carbon Capture, Utilization, and Storage Agency' to oversee licensing matters and regulate all activities and facilities related to CCUS, including importation, transportation, industry development and safety matters;
• Introduces an injection levy on carbon dioxide storage site operators;
• Requires the registration of carbon capture facilities and stipulates permits required by operators for both offshore and onshore carbon storage sites; and
• Imposes penalties on persons who engage in carbon storage without the necessary permits or fail to comply with applicable regulations.

This law, when in force, will apply only to Peninsular Malaysia and the Federal Territory of Labuan, excluding Sarawak and Sabah in East Malaysia. Notably, Malaysia’s first carbon capture project and one of the largest offshore carbon storage initiatives, the Kasawari Project, is located in Sarawak.

Why does it matter?

The CCUS Bill represents another step forward in Malaysia's goal of achieving net-zero emissions by 2050 and strengthens its position as a leader in low-carbon technology in the region.

2. Malaysia enforces energy efficiency laws

What happened?

Malaysia's Energy Efficiency and Conservation Act 2024 (EECA) and the Energy Efficiency and Conservation Regulations 2024 came into effect on January 1, 2025 (Energy Efficiency Laws).

The EECA governs the obligations of energy users and regulates energy-using products. Energy users with annual usage equal to or exceeding the 21,600 GJ are required to appoint a registered energy manager, develop and implement an energy management system, prepare an energy efficiency report and conduct an energy audit.

The Energy Efficiency Laws also include registration requirements for manufacturers and importers of certain energy-using products. These products must meet minimum energy performance standards, display an energy efficiency rating label and encourage the use of energy-efficient products.

The Energy Transition and Water Transformation Ministry estimates that approximately 4.3% of energy users in the industrial sector, contributing to about 66% of energy consumption within the sector, will be subject to the EECA.

Why does it matter?

The enforcement of the Energy Efficiency Laws is a significant milestone for Malaysia in achieving its National Energy Transition Roadmap goals, particularly in effectively managing energy demand. These laws are expected to positively impact Malaysia's sustainable development agenda and socioeconomic benefits through 2050, including cumulative energy savings.

THE PHILIPPINES

1. The Philippines Department of Energy opens Green Energy Auction 4

What happened?

As mentioned in our previous update, the Philippines Department of Energy (DOE) has announced plans for its fourth Green Energy Auction (GEA-4). On March 12, 2025, the DOE issued advanced notice of GEA-4 by posting the Notice of Auction (NOA) and officially releasing the Terms of Reference for GEA-4 (TOR). The TOR provides a clear framework for the auction process for GEA-4 and outlines the technical, financial and commercial requirements for the DOE’s selection process.

Significantly, this is the first DOE auction to integrate renewable energy and energy storage systems (IRESS), specifically solar power plants paired with battery energy storage systems. For IRESS projects, only solar facilities that are not yet commercially operational and do not have Provisional Authority to Operate or Certificate of Compliance may be registered. Solar facilities currently facing curtailed operations may also apply.

Notably:

• The supply contract for winning renewable energy projects under GEA-4 will be for 20 years, starting from the commercial operation of the plant; and
• The Green Energy Tariff for GEA projects will now be subject to indexation, as determined by the Energy Regulatory Commission, in accordance with Feed-in-Tariff rules. These adjustments aim to ensure that tariff rates remain fair, transparent and responsive to market fluctuations, thereby reinforcing investor confidence in the renewable energy sector.

Why does it matter?

GEA-4 aims to accelerate the Philippines' energy transition by enhancing grid reliability and flexibility, supporting growing electricity demand and driving substantial investment in renewable energy in the Philippines.

THAILAND

1. Thailand introduces first green electricity tariff

What happened?

In January 2025, Thailand's Energy Regulatory Commission (ERC) officially launched its first green electricity tariff through the Utility Green Tariff (UGT) program. This program was launched together with the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority (Utilities).

The ERC Notification on the Criteria for Service Provision and Determining the Utility Green Tariff B.E. 2566 (2023) establishes two types of utility green tariffs (UGT1 and UGT2), differentiated by their electricity sources:

• UGT1 relies entirely on renewable power from existing state-owned sources such as hydropower dams, with a combined power generation capacity of 1,135 MW.
• UGT2 (when implemented) will allow participants to select specific sources of renewables, such as wind or solar, from either state-owned or private renewable generators.

Under the program, companies interested in buying renewable power at a rate of 4.21 baht per KWh (UGT1) must sign offtake agreements with the Utilities.

The application period for UGT1 closed on February 28, 2025. Following UGT1, the next phases will include the introduction of UGT2, which is still under review.

Why does it matter?

The first phase of the UGT program is an important step in attracting international investment and advancing Thailand's clean energy transition.

VIETNAM

1. Vietnam's new decree on renewable energy development and incentives

What happened?

On March 3, 2025, the Vietnamese government issued Decree No. 58/2025/ND-CP (Decree). Key points include:

• The Decree introduces new regulations for the development of renewable energy and new energy, including offshore wind projects.
• New energy projects generating electricity entirely from green hydrogen, green ammonia or a combination of both, and supplying power to the national grid, will be eligible for certain incentives if they meet the required criteria. These incentives include:
  • Exemption from maritime area use fees during the capital construction phase for up to three years, followed by a 50% fee reduction for the next nine years; and
  • Full exemption from land use and rental fees during the capital construction phase for up to three years.
• The Decree provides incentives for offshore wind projects in Vietnam, including:
  • Exemption from the sea area use levy during the basic construction period for up to three years from the date of construction commencement; and
  • A 50% reduction in the sea area use levy for 12 years following the exemption period during the basic construction phase.

Certain conditions are attached to these incentives, including obtaining investment policy approval from the applicable authorities before January 1, 2031.

Why does it matter?

The Decree is an important step in bolstering Vietnam's renewable energy development and provides financial and regulatory support to attract investments in renewable energy projects.

SOUTH KOREA

What happened?

Since our last update, the most significant development in South Korea’s offshore wind sector has been the passage of the Special Act on the Promotion of Offshore Wind Power Distribution and Industrial Development, commonly known as the “One Stop Shop Act.”

The One Stop Shop Act is part of a broader energy reform package that also includes new grid infrastructure legislation and nuclear waste management legislation.

The One Stop Shop Act introduces significant changes to Korea's offshore wind development framework, including:

• New zoning system: Future offshore wind development will be restricted to specific zones designated by the Ministry of Trade, Industry and Energy, subject to certain exceptions.
• Centralized approval process: A new national government-level committee, including the Prime Minister, will oversee and coordinate the various licensing and permitting regimes for offshore wind projects in South Korea.
• Transitional arrangements: The One Stop Shop Act preserves the rights of developers who have already secured key permits and licenses, including electrical business licenses.
• Integrated approvals: Within designated development zones, projects will benefit from a consolidated permitting process covering multiple regulatory requirements.
• Public sector provisions: The legislation includes specific measures to facilitate the involvement of government-linked enterprises in offshore wind development.

Why does it matter?

This legislative package aims to overcome key barriers to offshore wind deployment in South Korea, particularly the complex permitting process that has historically delayed project development. The reforms should provide greater certainty to developers and investors.

The parallel grid infrastructure reforms are also important, given ongoing concerns about network capacity for the planned expansion of renewable generation.

Most provisions of the One Stop Shop Act will take effect in early 2026, though certain permitting changes apply immediately. Further important details are expected through subordinate regulations within the next year or so.

Want to know more? Contact one of the authors on the Orrick team: Karthik Kumar, Michael Tardif, Adam Smith, Ari Bessendorf, Albert Yu, Lynette Lim, Deska Widianto or Kelly Choo.