Distinguished guests,

Ladies and gentlemen,

It’s a privilege to join you at Bo’Ao Forum for Asia to discuss the important topic on World Economic Transformation.

We are meeting at a pivotal moment when the world stands on the cusp of a set of profound changes. Among the most influential forces shaping these transformations are climate change and digitalization.

Climate change is no longer distant and abstract. According to Intergovernmental Panel on Climate Change (IPCC), we only have less than 6 years to hold global warming below 1.5°C at the current emissions trajectory. Meanwhile, we have witnessed increasing occurrences of extreme weather, water stress and ecosystem degradation worldwide Developing countries are often hit first and most, where over 90% of climate-related deaths and displacements occurred between 2010 and 2023.

Rapid digitalization, particularly generative AI, is transforming productivity and competitiveness. But they are also creating a new divide increasingly between AI-capable economies and AI-constrained economies. This emerging divide is defined by access to data, computing power, skills, energy-reliable infrastructure and regulatory readiness.

 I.     What has Asia achieved in dual transformations?

As the home to nearly 60% population and 53% manufacturing output of the world, Asia today accounts for roughly 60% of global CO₂ emissions. More than ever, the region must pursue a greener and smarter development path. Encouragingly, the dual transformations in Asia are already underway:

• Fast expansion of renewable energy generation and transmission. Across East, Southeast and South Asia, solar and wind installations are accelerating rapidly, supported by falling equipment costs and expanding grid investment. China alone added over 430 gigawatts of new wind and solar capacity in 2025, more than the rest of the world. The cross-border renewable energy transmission project in ASEAN – LMTS Power Integrated Project, has completed its Phase 1 in 2024, transmitting 100 MW of hydropower from Laos to Singapore via Thailand and Malaysia.
• Wide application of Digital-enabled Infrastructure. Smart grids are revolutionizing how electricity is generated, transmitted, distributed, and consumed across the continent. In Indonesia, digitalized grid control systems allow control centers to adjust and stabilize electricity intake from renewables based on real-time weather conditions and consumption patterns. Hangzhou's "City Brain" AI system has improved information coordination and operational efficiency across transport and services, contributing to measurable reductions in greenhouse gas emissions at the city scale.

II.    What can we learn from Asia’s experiences?

There are many cases like these that are profoundly changing the ways of life, work and thinking of the people in this land. What is happening in Asia will reconfigure the world economy.

First, Green and digital transformations can go hand in hand

Across Asia, digitalization and decarbonization are increasingly pursued as a single, mutually reinforcing agenda: digitalization improves efficiency and reduces emissions in energy and manufacturing sectors, at the same time increasing green energy powers data centers and AI computing.

This is critically important when development financing is becoming scarce, if both green and digital objectives can be achieved one single project.

Second, application-oriented approach generates impacts

Rather than waiting for frontier technologies to mature, many regional economies start with deploying proven technologies across sectors.  

India’s digital public infrastructure, which now covers about 1.4 billion people and processes roughly 10 billion real-time digital payment transactions each month, demonstrates how digital platforms can be scaled first, and sophisticated AI applications can be layered on later.

This pragmatism reduces risk, lowers learning costs, allows developing economies to capture early development benefits, and more importantly, helps prevent the digital divide from widening further.

Third, strong regional initiatives ensure mutual benefits

Asia's green and digital transformations have been supported by many regional initiatives.

In Southeast Asia, the ASEAN Power Grid initiative aims to create a more interconnected electricity market that enhances energy security, supports renewable energy integration, and improves resilience against disruptions.

Regional cooperation is also advancing in the digital economy. Coordination on standards, connectivity and supply chains can reduce fragmentation and accelerate the spread of new technologies.

III.    What roles can MDBs play?

MDBs, including the Asian Infrastructure Investment Bank, have a critical role to play in helping conceptualize, finance and scale these transformation pathways.

First, investing in the next generations of infrastructures.

Since 2022, AIIB has allocated more than half of total approved financing to climate-related investment. This number is over 70% in 2025. To respond to the fast-growing energy needs of AI computing and data centers, AIIB will continue to scale up investment in green power generation, smart grid, transmission modernization, and battery storage etc.

AIIB is also doubling down its support to digital infrastructure such as telecommunications, data storage, software and devices, as well as the digitalization of traditional infrastructure.

Second, narrowing financing gap through financial innovation.

The financing gap of green and digital investment in Asia far exceeds the public funds. Catalyzing more private capital via innovative financing is therefore indispensable.

Last year, we launched an instrument of Climate-focused Policy-based Lending (CPBL), aiming to support Member-led policy and institutional reforms conducive to crowding in private sector investment in climate mitigation and adaptation.

We also invested USD 100 million in the Keppel-Pierfront Private Credit Fund (KPPCF), one of the earliest dedicated infrastructure private credit funds in the Asia‑Pacific region, to provide bespoke debt financing to infrastructure sectors such as renewable energy, digital infrastructure, and environmental infrastructure, areas that traditional banks often struggle to finance.

Third, supporting regional cooperation and connectivity

MDBs are uniquely positioned to provide neutral platforms for dialogue and coordination on complex cross-border issues, such as infrastructure connectivity, regional economic integration, and policy alignment.

Together with peer MDBs, AIIB is actively engaging in c�ross-border initiatives, such as the ASEAN Power Grid (APG). which will help balance regional electricity supply and demand, including the rapidly growing demand from data centers.

We also promoted the origination of viable cross-border project pipelines in transport, energy, and digital infrastructure by working in partnership with the ASEAN Secretariat and the Multilateral Cooperation Center for Development Finance (MCDF). These joint programs are designed to identify and develop projects that address regional connectivity needs.

Ladies and gentlemen,

Asia’s green and digital transition is not simply about new technologies. It is about redefining a new model of growth, which is cleaner, smarter and more connected.

By deepening regional cooperation, integrating complementary strengths and mobilizing multilateral platforms for finance and knowledge, Asia can contribute practical, scalable and inclusive solutions to the global sustainable development agenda.

Thank you.