SEA’s climate tech funding is freezing, but energy tech stays hot

Southeast Asia is warming up with record temperatures across the region. Despite this, funding for its climate tech sector remains freezing cold.

When US President Donald Trump returned to the White House last year, several startups in Southeast Asia told Tech in Asia that they expected global funding for the sector to temper because of the world leader’s notorious anti-climate stance. The country is the biggest source of funding for the climate tech sector, after all.

It does not help that climate tech policy within Southeast Asia has been “inconsistent,” says JJ Erpaiboon, head of operations at climate tech-focused The Radical Fund.

This has made it harder to attract private capital into the sector, she adds.

Take the Philippines, for example, which initially called for investment for waste-to-energy (WTE) development as early as 2018. WTE facilities are designed to help recycle certain solid waste and turn it into a power source. Yet the government only approved the launch of the first project in late 2025.

All eyes on energy tech

Interestingly, there is one climate tech vertical in Southeast Asia that has been enjoying growing interest despite the global headwinds facing the sector: energy tech.

Startups in this vertical have a myriad of offerings, from energy efficiency services to financing for household installation of solar panels. As of 2026, these companies received a total of US$291 million in funding, data from Tracxn shows.

The energy crisis brought about by the conflict in the Middle East has driven renewed interest not only from investors but also from customers.

Blue Whale Energy, which operates a virtual power plant in Singapore, is seeing its client base more than double by year-end. The startup helps firms sell any extra power they generate from their solar panel systems into the grid.

Even household users are looking for ways to reduce power costs by installing solar panels on their rooftops.

In the past year, startups focused on solar panel installations – for both enterprise and household use – have also received funding as the cost of solar panels dropped.

Early this year, Vietnam-based SmartSolar secured US$1.3 million in debt, bringing its total funding to over US$3 million. The startup extends financing to help small businesses install solar panels on their facilities.

The Middle East conflict underscores the importance of energy security among countries. For nations that import large amounts of fossil fuels, transitioning to renewable sources of energy has never been more appealing.

One unlikely industry that has driven the interest in energy tech, though, is data centers, says Erpaiboon. As power-hungry facilities, data centers usually need to contract power generators and tap energy efficiency services to ensure service delivery.