“I do think it’s feasible, but I think it will require sacrificing cost to achieve the objective,” said Guillaume Lucci, president and CEO of Prime Infrastructure Capital, onstage at Fortune’s Southeast Asia 500 Summit in Ho Chi Minh City, Vietnam. 

“That will be a very difficult decision for a lot of the governments in our region to decide if we drive cost up and decarbonize, or maybe not so, and rethink some of these targets,” Lucci added, calling himself “a bit of a pessimist” on the question of whether the region can power an AI-era growth spurt without breaking its decarbonization targets.

Under the Paris Agreement, countries committed to holding the rise in global average temperature to well below 2°C above preindustrial levels and pursuing efforts to limit it to 1.5°C.

The Philippines, where Prime Infrastructure Capital is based, imports 98% of its oil from the Middle East. The Southeast Asian country declared a nationwide energy emergency in March, sending local fuel prices soaring. 

The country’s grid is not ready for the energy transition, either. “We have fairly poor grids [and] certainly not grids that are capable of receiving an abundance of variable energy,” Lucci said. “We’re building 2,000 megawatts of pumped hydro right now that will help stabilize the grid in the Philippines.”

Lucci’s caution is rooted in the Philippines, which imports 98% of its oil from the Gulf and declared a nationwide energy emergency in March after the Iran war broke out in February, sending local fuel prices soaring.

Kim-See Lim, chief investment officer of the Asian Infrastructure Investment Bank (AIIB), struck a more optimistic note, pointing to the region’s young, tech-savvy population and its rapid growth over the past two decades.

“It’s been the fastest-growing region in the last two decades, projected to continue on that trajectory,” Lim said during the panel. She added that Southeast Asia will need to transition because the effects of climate change are “felt quite severely” in the region.

About 25% of the world’s seaborne oil trade went through the Strait of Hormuz in 2025, and an estimated 80% of the oil and oil products passing through the strait were destined for Asia, according to the International Energy Agency (IEA). “The LNG prices are still double of where it used to be before the Middle East issue, and oil prices are close to double as well,” Lim noted, citing the energy shock that followed the war.

Asked about the region’s energy investment gap, Lim said the main obstacle was not capital but a shortage of investor confidence in projects. Companies still expect a minimum return in emerging markets, she said, while perceived risk remains “too high.”

“Clearly, capital is not lacking,” she said. “What’s lacking really is the confidence, right? And that’s bankable projects.”

The IEA projects Southeast Asia’s electricity demand will rise by a further 5.4% annually between 2026 and 2030.

The disruption matters sharply for Asia. About 25% of the world’s seaborne oil trade went through the Strait of Hormuz in 2025, and options for oil flows to bypass Hormuz are limited, according to the International Energy Agency (IEA). An estimated 80% of oil and oil products that went through the Strait of Hormuz were destined for Asia. 

Southeast Asia’s next growth cycle will depend on access to secure, affordable, and reliable energy. The IEA reports that regional electricity demand is projected to rise by a further 5.4% annually during 2026 to 2030. 

Data centers are putting pressure on energy systems. Global electricity consumption from data centers reached an estimated 415 terawatt hours in 2024—about 1.5% of global electricity consumption—and the IEA says AI is accelerating deployment of high-performance servers, driving up power density in data centers.

“Many of the data centers have to move far from the community to the energy park,” said Xingjian Pang, Schneider Electric’s East Asia president. Locating facilities near communities could provoke protests over their electricity and water use, he said.