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Deep dive: Southeast Asia

Spotlight on air quality investment in the Southeast Asia region, including a case study on Bangkok's bus electrification. Part of The State of Global Air Quality Funding 2026, the only analysis of international development funding for clean air in 2020-2024.

  1. Report home
  2. Key findings
  3. Trends in air quality funding
  4. Top funders for air quality
  5. Forms of funding
  6. Where is funding going?
  7. Which sectors get air quality funding?
  8. Funding for fossil fuels vs air quality
  9. Deep dive: Southeast Asia
    1. Southeast Asia is a leading recipient of air quality funding
    2. JICA and ADB provide 91% of funding
    3. Case study: Bangkok
  10. Funding focused on super pollutants
  11. Recommendations for development donors
  1. Report home
  2. Key findings
  3. Trends in air quality funding
  4. Top funders for air quality
  5. Forms of funding
  6. Where is funding going?
  7. Which sectors get air quality funding?
  8. Funding for fossil fuels vs air quality
  9. Deep dive: Southeast Asia
    1. Southeast Asia is a leading recipient of air quality funding
    2. JICA and ADB provide 91% of funding
    3. Case study: Bangkok
  10. Funding focused on super pollutants
  11. Recommendations for development donors

Southeast Asia is a leading recipient of air quality funding

The region accounts for more than a quarter of all outdoor air quality funding for 2020-2024, equating to $4.4 billion. Southeast Asia has experienced rapid urbanisation, industrialisation and motorisation over the past four decades, contributing to rising emissions of air pollutants across the region.1 Agriculture, industry, transport and energy are major sources of PM2.5 emissions, while transboundary haze from agricultural burning, peatland and forest fires remains a significant contributor to air pollution.2

Southeast Asia is a major recipient of air quality funding. Once adjusted for population, Southeast Asia accounted for more than double the per capita funding amount of the next-largest region. It is also home to ADB, a key air quality funder.

Air quality funding is highly concentrated within the region. The Philippines and Indonesia together received 97% of outdoor air quality funding to Southeast Asia between 2020-2024. The Philippines alone received more than two-thirds of total air quality funding to the region.

JICA and ADB provide 91% of funding

Southeast Asia is the second-largest recipient of combined ADB and JICA financing overall. Total air quality funding in the region was highly concentrated in a small number of large transport projects. The nine largest projects accounted for more than two-thirds of regional funding, and were all transport or urban mobility investments financed by either ADB or JICA in the Philippines or Indonesia.3,4

Flows fail to target the greatest pollution exposure in Southeast Asia

Despite receiving a large proportion of global air quality funding, this often still fails to reach the countries with the highest air pollution levels. The Philippines and Indonesia have among the lowest levels of pollution exposure in the region, when considered at the country wide level, yet they receive the highest amounts of air quality funding.

While all countries in Southeast Asia exceed the WHO-recommended annual mean PM2.5 concentration (5 µg/m³), the Philippines’ annual average (17.1 µg/m³) is markedly lower than Myanmar’s (33.4 µg/m³). Lao PDR, Myanmar, and Timor-Leste received the lowest levels of total air quality funding in Southeast Asia in 2020-2024, together accounting for just 0.2% of total air quality funding, and 0.4% of outdoor air quality funding, despite Lao PDR and Myanmar having some of the highest PM2.5 exposure in the region (see table below).

Pollution exposure and pollution source should both be considered to inform geographical funding flows. While pollution exposure indicates where health burdens are concentrated, pollution sources indicate where interventions can achieve the greatest reductions in emissions by tackling pollution at source. These locations do not always coincide, particularly in Southeast Asia where, for example, transboundary haze can cause pollution impacts across national borders.5 For example, emissions from neighbouring countries contribute to severe seasonal air pollution in Thailand.6 Historically, transboundary haze has been most prominent in Southern Southeast Asia (Brunei Darussalam, Indonesia, Malaysia, Singapore, and Thailand). In recent years, however, agricultural burning and forest fires have intensified in Northern Southeast Asia (Cambodia, Lao PDR, Myanmar, Thailand, and Viet Nam).

Funding distribution broadly aligns with measures of financial development and institutional capacity

Funding shares among the region’s top recipients align with external financial indicators. The Financial Development Index and Financial Markets Depth Index shown in the table below capture factors commonly understood as key drivers for MDB financing.7,8 The three lowest recipients of total air quality funding (Lao PDR, Myanmar, and Timor-Leste) also rank among the weakest on both measures. While these indicators do not establish causality, the pattern suggests a potential relationship between financial system capacity and access to air quality finance in Southeast Asia, with Thailand as a notable outlier. Countries with deeper financial systems and capital markets may be better positioned to originate, intermediate and absorb investment, potentially reinforcing existing disparities in funding access.

Allocating finance based on investment readiness alone risks systematically disadvantaging countries with weaker financial systems, irrespective of their air quality funding needs. Ensuring equitable access requires funders to account for differences in financial system capacity when designing and allocating finance. This could include providing concessional and grant-based finance, technical assistance and project-preparation support alongside investment, helping countries with weaker financial systems build investable pipelines and strengthen their capacity to access and absorb future funding.

CountryTotal Air Quality Funding 2020-2024 ($ Mn)GDP rank (current US$) (2024)9Financial Markets Depth Index ranking (2021)10Financial Development Index ranking (2021)11
Philippines11,607423
Indonesia2,987134
Viet Nam1,044342
Cambodia590675
Thailand361211
Lao PDR29756
Myanmar8567
Timor-Leste28No dataNo data
Southeast Asia Comparative Rankings (Institutional Capacity)

Case study: Bangkok

How Bangkok brought MDB finance to city streets

Cities often lead on air quality but cannot borrow directly from MDBs because of national borrowing rules, sovereign-guarantee requirements or limited fiscal autonomy.1 Bangkok shows how development finance can still reach local delivery under these constraints.

In 2023, ADB, JICA and EXIM Thailand committed to a THB3.9 billion (~US$110 million) financing package to support the procurement of up to 1,175 electric buses for public transport services in Bangkok, with ADB acting as lead arranger. The buses were deployed through private-sector transport operators on licensed routes across the city.2

The structure is important because Bangkok Metropolitan Administration (BMA) did not borrow the money, guarantee the loans or take on the debt. Development lenders instead financed a corporate intermediary that could acquire the buses and make them available to licensed operators. The financing package included Thai baht denominated facilities, reducing the foreign-exchange risks that can make hard-currency borrowing difficult for locally financed services.

Several factors helped the investment move forward. ADB had already supported analysis of Thailand’s public-bus electrification market through the ASEAN Catalytic Green Finance Facility, helping build the investment pipeline.3 More broadly, ADB combines private-sector financing for electric mobility with technical and policy support to government, including work to strengthen low-emission urban transport and develop future investment opportunities.4

The air quality rationale was explicit. ADB and the Thai government identified lower air pollution, including PM2.5, and improved health among the programme’s intended outcomes. Bangkok-specific research estimates that full electrification of the city’s diesel bus fleet could reduce transport-related PM2.5 emissions by around 21%.5

The model has relevance well beyond Bangkok. Cities that cannot borrow directly may still unlock large-scale clean air investment where a viable private, state-owned or municipal operator can take on finance, public authorities provide a stable regulatory framework, and targeted technical or concessional support helps make the project bankable. BMA remains important in setting local air quality priorities, monitoring pollution and linking transport investment to public-health needs. This role is complemented through its participation in Breathe Cities, which supports the city with data, technical assistance and local implementation capacity.6

References

1World Bank, Unlocking Subnational Finance: Overcoming Barriers to Finance for Municipalities in Low- and Middle-Income Countries (2025)

2Asian Development Bank, ADB, Energy Absolute Sign 3.9 Billion Thai Baht Deal for E-Bus Purchase (6 December 2023); ADB, Energy Absolute Public Bus Electrification Project

3Asian Development Bank, Annual Report 2023; KliK Foundation, Bangkok E-Bus Programme 

4Asian Development Bank, ADB’s Support to E-Mobility Transition in Thailand (2024); ADB, Promoting Green Transportation in Asia and the Pacific

5Gabriel, N.R. et al. (2021), “A comparative life cycle assessment of electric, compressed natural gas, and diesel buses in Thailand,” Journal of Cleaner Production, 314, 128013 

6Breathe Cities, Bangkok city page and programme information 

Notes and references

1World Bank. 2025. World Development Indicators; Health Effects Institute. 2025. State of Global Air 2025.

2Thongsame W et al. 2025. Source attribution and health burden of PM2.5 in Mainland Thailand; ASEAN. 2002. ASEAN Agreement on Transboundary Haze Pollution.

3JICA. 2025. JICA Philippines Annual Report 2025

4ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific

5Fang T, Gu Y, Yim SHL. 2024. Assessing local and transboundary fine particulate matter pollution and sectoral contributions in Southeast Asia during haze months of 2015–2019

6SEI. 2021. Air quality in Thailand: Understanding the regulatory context

7World Bank. 2024. CPIA criteria 2024

8Financial sector depth and market diversification are criteria in the World Bank’s Country Policy and Institutional Assessment (CPIA), the basis for the International Development Association (IDA) Resource Allocation Index (IRAI) that drives the IDA’s performance-based allocation. The African Development Bank and Asian Development Bank adopted the CPIA framework as the starting point for their own Performance Based Allocation (PBA) systems in 2005, meaning this criterion is embedded across major MDBs’ allocation formulas.

9World Bank. 2024. World Development Indicators: GDP

10TheGlobalEconomy.com. 2021. Financial Markets Development, Depth in South East Asia

11TheGlobalEconomy.com. 2021. Financial Development – Country Rankings.