Southeast Asia (SEA) entered 2025-26 with sustained economic resilience, strong infrastructure pipelines and rising foreign investment flows. As global supply chains recalibrate and domestic demand strengthens, governments across the region have accelerated investments in energy, transportation, urban infrastructure and digital networks.

The infrastructure narrative has shifted from expansion alone to transformation, embedding sustainability, resilience, digitalisation and private capital participation at scale. Clean energy investment is approaching parity with fossil fuel spending, ports and airports are scaling to record volumes, metro systems are expanding across capitals, and digital infrastructure is becoming foundational to economic competitiveness.

Key sectoral developments

Energy

SEA’s energy sector in 2025 marked a structural turning point, as clean energy investment approached parity with fossil fuel spending amid rising electricity demand and net zero commitments. While coal remains deeply embedded in the regional power mix, policy reforms, sustainable finance growth and transition finance mechanisms are reshaping long-term investment.

  • In 2025, clean energy investment in SEA rose to nearly half the total energy investment in the region, reflecting a structural shift from fossil fuel-dominated growth. Fossil fuel investment declined from approximately $70 billion in 2015 to around $50 billion in 2025, while clean energy investment increased to about $47 billion. This transition has been driven by rising electricity demand, national net zero commitments and policy reforms encouraging renewable deployment.
  • In 2025, installed coal-fired capacity in SEA reached approximately 121 GW, with over $130 billion in unrecovered capital at risk of becoming stranded assets. This has prompted the development of transition finance mechanisms aimed at enabling early coal plant retirement while maintaining energy security and financial stability.
  • In 2025, sustainable finance markets in SEA expanded significantly, with sustainable debt issuance increasing from $17 billion in 2020 to $60 billion in 2024. Instruments such as green bonds and sustainability-linked loans have played a central role in mobilising private capital for renewable energy and grid investments.
  • In 2025, SEA strengthened its clean energy manufacturing base, with Vietnam, Thailand and Malaysia emerging as leading solar photovoltaic manufacturing hubs outside China. This expansion has reinforced the region’s integration into global renewable energy supply chains and supported export-led growth.
  • In 2025, Indonesia continued to consolidate its dominance in the global nickel supply chain, producing over 60 per cent of global nickel output and attracting more than $50 billion in greenfield mining investment between 2014 and 2023. The expansion of nickel refining capacity has supported the development of electric vehicle and battery value chains across the region.
  • In 2025, the Monetary Authority of Singapore advanced transition finance initiatives under the TRACTION platform, including pilot efforts in the Philippines to accelerate the retirement of a 246 MW coal plant. These mechanisms aim to mobilise blended finance structures to manage stranded asset risks and facilitate an orderly energy transition.

Transportation

SEA’s transportation sector in 2025 experienced record throughput, major capacity expansions and growing integration of sustainability frameworks. Ports and airports scaled infrastructure to accommodate rising trade and passenger flows, while governments embedded green fuel adoption, digitalisation and long-term resilience into expansion plans.

  • In December 2025, Hutchison Ports Thailand received three new remote-control super post-Panamax quay cranes at Terminal D of Laem Chabang port. This final phase of development enables the terminal to handle three mega-vessels and one feeder vessel simultaneously, with an operating capacity of 3.5 million twenty-foot equivalent units (TEUs).
  • In December 2025, Long Thanh Inter­na­tional Airport in Vietnam achieved a historic milestone as the first passenger flight arrived, officially inaugurating civil aviation operations at the new airport.
  • In November 2025, Indonesia activated Terminal 1C at Soekarno-Hatta Inter­na­tional Airport, increasing annual passenger capacity to approximately 96 million passengers per annum following extensive upgrades. Terminal 1F is scheduled to open in the first quarter of 2026 as a dedicated low-cost international terminal.
  • In September 2025, Cambodia officially opened Techo International Airport in Phnom Penh, replacing the former Phnom Penh International Airport. The airport became fully operational by January 2026 and represents a major expansion of the country’s aviation capacity.
  • In June 2025, the Nusantara International Airport in Indonesia’s new capital region entered operational status following certification. The airport currently handles charter, government and air force operations, with full commercial passenger services targeted for 2026.
  • In May 2025, Singapore marked the groundbreaking ceremony for Changi Airport Terminal 5. The first phase of the mega-terminal is expected to handle around 50 million passengers annually and is designed as a Green Mark Platinum Super Low Energy building, integrating sustainable aviation fuel adoption frameworks from 2026.
  • In 2025, Thailand advanced Phase 3 of the Laem Chabang deep-sea port expansion project, targeting an increase in container handling capacity from approximately 11 million TEUs to 18 million TEUs. New terminals are scheduled to become operational between 2027 and 2029.
  • In 2025, the Philippines commenced construction of the PhP 16.93 billion New Cebu international container port in Consolacion, Cebu. The port, to be built on 25 hectares of reclaimed land, is expected to open in the second quarter of 2028 with an annual handling capacity of 375,900 TEUs.

In 2025, Singapore recorded container throughput of 44.66 million TEUs, representing an 8.6 per cent year-on-year increase. Vessel arrivals reached 3.22 billion gross tonnage, reflecting record activity. During the year, Singapore established new green and digital shipping corridors with India and the Republic of Korea, bringing the total number of such corridors to nine and strengthening maritime decarbonisation frameworks.

Urban infrastructure

Urban infrastructure investment across SEA in 2025 focused on improving mass transit connectivity, strengthening wastewater management systems and enhancing climate resilience. Governments prioritised metro expansion in major cities while advancing regulatory reforms and digital technologies in water and waste management.

Urban rail

  • In December 2025, tunnel boring machine (TBM) no. 1 completed tunnelling between stations S9 and S12 on the Nhon-Hanoi station metro line under Package CP03, which reached 72 per cent completion. A second TBM continued excavation towards station S11 as part of Hanoi’s expanding metro system
  • In 2025, Ho Chi Minh City metro line no. 1 recorded nearly 19 million passenger trips in its first year of operation, demonstrating strong public uptake of mass transit and reshaping daily mobility patterns in the city.
  • In 2025, the Hanoi People’s Committee commenced construction of the Nam Thang Long-Tran Hung Dao section of Metro Line 2, an 11 km line valued at VND 35 trillion, including 1.94 km elevated and over 9 km underground sections.
  • In 2025, the Department of Trans­por­tation in the Philippines began construction of the Ortigas station of the Metro Manila Subway Project in Pasig City after delays due to right-of-way issues. The 33 km line will feature 17 stations and is expected to commence partial operations by 2028.
  • In 2025, Thailand’s Mass Rapid Transit Authority reported that the southern extension of the Purple Line reached 65 per cent completion, with the first TBM breaking through at Memorial Bridge station. The extension spans 23.63 km with 17 stations.
  • In 2025, Malaysia received public-private partnership proposals from three consortiums for Johor Bahru’s elevated autonomous rapid transit system, spanning three corridors with 32 stations, estimated to cost nearly RM 7 billion.
  • In 2025, Cambodia’s Ministry of Public Works and Transport, in collaboration with the Asian Infrastructure Investment Bank, initiated a feasibility study for a metro system in Phnom Penh to address traffic congestion.

Water and wastewater

  • In December 2025, Malaysia completed and operationalised the Semenyih 2 water treatment plant (WTP) with full asset digital twin integration. The plant treats around 100 million litres per day and enables real-time monitoring, predictive analytics and operational optimisation.
  • In November 2025, a pilot industrial wastewater reuse project was launched at the Deep C Industrial Zones in Vietnam under the UNDP-led Accelerate Circular Economy Business Programme. The project uses nanofiltration and reverse osmosis to enable treated effluent reuse within the industrial park.
  • In September 2025, Indonesia introduced a new nationwide domestic wastewater regulation, establishing comprehensive wastewater quality standards and minimum treatment technology requirements. The regulation replaces fragmented rules and mandates compliance for new developments immediately, with transition periods for existing facilities.
  • In August 2025, Vietnam inaugurated the Yen Xa WTP with a treatment capacity of 270,000 cubic metres per day, significantly expanding wastewater treatment capacity in Hanoi.
  • As of June 2025, Manila Water in the Philippines was providing sewerage services to 311,663 connections, marking a 4.67 per cent year-on-year increase and indicating steady expansion of wastewater coverage in Metro Manila.
  • In January 2025, Thailand implemented a complete ban on plastic waste imports, reshaping regional waste trade flows and accelerating domestic investment in recycling and material recovery infrastructure.

Communications

The telecom sector in SEA in 2025 moved into a more mature and infrastructure-intensive phase, marked by accelerated 5G rollouts, expansion of subsea and satellite connectivity, rapid data centre growth and strengthened cybersecurity governance frameworks.

  • In 2025, Cambodia entered active 5G rollout mode, with Cellcard, Metfone and Smart launching commercial 5G services in Phnom Penh and other urban centres. This marked a significant milestone in the country’s digital infrastructure development.
  • In mid-2025, Brunei achieved over 90 per cent 5G coverage of populated areas, reinforcing its leadership in nationwide next-generation mobile connectivity.
  • In 2025, Vietnam established a three-operator 5G landscape as MobiFone launched commercial 5G services, joining Viettel and VNPT and accelerating nationwide deployment.
  • In 2025, Malaysia advanced plans for a dual 5G model beyond the wholesale network operated by Digital Nasional Berhad, inviting proposals from major operators to strengthen competition and accelerate roll-out.
  • In 2025, Singapore retained its position as SEA’s primary subsea hub, supported by around 26 active undersea cables. Additional systems such as ADC and SJC2 progressed to enhance international bandwidth capacity and resilience.
  • In 2025, satellite broadband expansion accelerated across Indonesia and the Philippines, with operators partnering with low earth orbit providers to bridge connectivity gaps in remote and island regions.
  • In 2025, Singtel commenced construction of a 58 MW AI-ready data centre in Singapore, designed to support high-density workloads including AI model training, reflecting rapid growth in hyperscale and AI-driven demand.
  • In 2025, Vietnam approved a new Personal Data Protection Law, scheduled to take effect in January 2026. It strengthened regulatory requirements around data handling, cross-border transfers and cybersecurity compliance.

Building the next phase

SEA’s infrastructure story in 2025-26 reflects a region moving decisively from capacity expansion to structural transformation. Across energy, transport, urban systems and digital networks, investment is increasingly aligned with long-term sustainability, resilience and competitiveness. Clean energy is approaching investment parity with fossil fuels, transition finance tools are emerging to address coal-related risks, and grid modernisation is gaining urgency. Ports and airports are scaling not only to accommodate rising trade and passenger flows, but also to integrate green fuels, digital tracking and operational efficiency. Urban rail networks are reshaping mobility patterns in major cities, while wastewater reform, circular economy pilots and digital twin technologies signal a shift towards smarter and climate-resilient urban services. At the same time, 5G mainstreaming, subsea expansion and AI-ready data centre development are strengthening the digital backbone that underpins industrial growth and regional integration.

Looking ahead, the next phase of SEA’s infrastructure evolution will depend on policy coherence, financing innovation and institutional capacity. Bridging grid investment gaps, managing coal transition risks, ensuring sustainable energy supply for data centre growth and maintaining regulatory consistency across markets will be critical. Blended finance, public-private partnership frameworks and sustainable capital markets will play a central role in crowding in private investment at scale. If these elements align, SEA is well positioned to consolidate its role as a global production hub, a clean energy manufacturing base and a digitally connected economic powerhouse. The foundations laid in 2025-26 suggest that the region is not merely building more infrastructure, but building smarter, greener and more future-ready systems for the decades ahead.