Analysis of the Week: Penetration of foreign investors in APAC’s top renewable markets since 2021

South Korea and Vietnam see high penetration from foreign investors, spurred by incentives: Foreign investors are increasingly attracted to South Korea due to its investor-friendly policies and excellent infrastructure. Primarily, US-based firms like BlackRock have taken advantage of the strong bilateral relations between the US and South Korea. The revised US-Korea Free Trade Agreement grants US investors the same privileges as domestic investors in terms of establishing, acquiring, and operating investments in the country. In Vietnam, foreign investors are enticed by tax incentives, including a 50% cut in corporate income tax for renewable energy investors for a 15-year period, as well as the availability of the FIT scheme, which ensures a stable revenue stream. As a result, companies such as TotalEnergies and EDP are taking advantage of the increasing market opportunities, as rapid economic development continues to drive up the country's electricity demand.

India and Japan witness strategic penetration by foreign investors in the form of synergistic partnerships: In markets such as India and Japan, foreign companies are seen to focus on equity investments and strategic partnerships, while domestic companies have dominated through asset-level acquisitions and corporate takeovers.

This is primarily due to the regulatory landscape in these markets, which requires careful planning and engagement with local partners to navigate permits, clearances, and compliance procedures. Additionally, demographic, linguistic, and cultural differences have posed challenges for foreign players in Japan's insular local business sector. Consequently, firms like TotalEnergies, Partners Group, Octopus Energy, and wpd have chosen to enter these markets through corporate investments or minority tap-ins, gradually expanding their presence.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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