Written by Kotchakorn (Build) Khwamchareon, Head of Programs at New Energy Nexus Thailand

Working with clean energy entrepreneurs across Thailand and Southeast Asia, I have sat in enough founder meetings, investor conversations and government consultations to recognise patterns that do not show up clearly in official data. One of them has been troubling me for a while: Thailand has the talent, demand and industrial base to build clean energy companies, but not yet the policy environment that makes it commercially rational for many of them to grow here.

The recent pressure on Thai fuel prices has made that gap harder to ignore. When global fossil fuel markets move, households, businesses and the wider economy feel it quickly. But Thailand’s ability to reduce that exposure depends on more than importing cleaner technology or setting long-term targets. It also depends on whether local clean energy startups can access the capital, incentives and market conditions they need to build practical alternatives at home.

Earlier this year, as part of research into Thailand’s clean energy investment landscape, I did deep interviews with three start-ups and two of the country’s leading venture and corporate venture funds active in clean energy and climate technology. I asked where their capital was going. Every single planned 2025 climate investment from all five funds was allocated outside Thailand. One fund reported a portfolio that was 80 percent United States, 15 percent Europe, and zero percent Thailand. When I asked why, the answer was consistent across conversations.

As one corporate investor put it: In four to five years of looking, they had not found a climate startup in Thailand, or anywhere in Southeast Asia, that met their criteria. “There isn’t sufficient capital. There isn’t sufficient incentive. So we don’t see world-class startups emerging in this region.”

I have heard versions of that statement many times. What strikes me now, with diesel having recently peaked at 50.54 baht per litre after climbing from 29.94 baht in February, is that it describes a loop that Thailand has been unable to break, and is now paying a concrete price for.

Thailand imports 57 percent of its crude oil from the Middle East. When the Strait of Hormuz effectively closed following the conflict with Iran, there was no domestic cushion. The government managed the emergency competently enough, releasing reserves, banning exports, and suspending fuel levies. But none of those measures could substitute for the distributed clean energy capacity and domestically anchored innovation that a decade of better-designed investment conditions might have produced.

The investors I spoke with are not wrong in their observations. Thailand’s climate startup ecosystem has not yet generated the density of investable companies that would shift those capital flows. But the question worth asking is why, and the answer is more specific than it might appear.

Working directly with founders, a pattern becomes clear. The ones who don’t make it past the earliest stage are not possibly short on technical capability or market understanding. They run out of money during the gap between spending on early development and receiving reimbursement from public grant programmes, which is typically how Thai government innovation support is structured. You spend first, document the costs, and wait. For a founder without reserves, that wait is the end of the company. The founders who survive it are disproportionately those with family capital to bridge the gap, which narrows the pipeline in ways that are plainly visible if you are sitting across the table from these teams regularly.

The second pattern I keep encountering involves incorporation. A founder I worked with recently built methane-reduction technology for livestock farms. The team is Thai. The farms are Thai. The product was developed in Thailand. When the company sought investment, no investor would put capital into a Thai legal entity. The holding structure moved to Singapore. The intellectual property and the future financial returns of that company now sit outside Thailand’s legal and financial system, before the company has generated a single baht in revenue. This is not unusual. It has become, in my observation, close to standard practice for Thai climate tech companies that manage to attract any serious investor attention.

Both of these patterns are individually rational. The grant structure reflects standard public accountability requirements. The Singapore incorporation reflects genuine investor preferences around regulatory clarity and exit pathways. Together, they produce an outcome that serves neither Thailand’s energy security nor its long-term economic interests. The country develops the technology and loses the value.

From where I sit, three changes would materially shift these conditions without requiring large new public expenditure.

The most fundamental is a carbon price, even a modest one, with a published schedule showing how it will rise over time. A clean energy startup building emissions-reduction technology in Thailand currently cannot convert its environmental impact into revenue, because there is no sufficient liquid, predictable, and economy-wide domestic mechanism to do so. Without that conversion, the financial model does not close, and experienced investors identify that problem immediately. Announcing a credible carbon pricing trajectory would improve bankability, not by changing the technology but by giving investors a future revenue logic.

The second is a government-anchored climate fund of funds, with the state acting as a limited partner in commercially managed investment vehicles rather than selecting companies itself. South Korea built its venture capital market depth partly through this mechanism, via the Korea Venture Investment Corporation, which draws in professional fund managers and co-investors by providing a credible anchor. Thailand has the fiscal capacity to do something similar at a meaningful scale for climate and clean energy. The effect would be to make Thailand a viable destination for the kind of institutional capital that currently goes to Singapore, the US, or Europe by default.

The third is a change in how government grants reach early-stage founders: upfront milestone-based disbursements rather than reimbursements. Singapore’s Startup SG programme works this way for exactly the reason I described above. Getting capital to founders at the moment they need to spend it, rather than after they have somehow survived without it, produces more companies that reach the stage where private capital will consider them. The cost to the government is the same. The timing is different, and the timing is what matters.

I recognise that none of these changes happen quickly, and that the immediate priority for Thailand’s policymakers is managing a fuel crisis, not redesigning innovation grant structures. But the research we conducted earlier this year, before the Iran conflict, already pointed toward the same structural gap that the crisis has now made visible at national scale. The investors and founders I have been talking to for years were already describing, in their own terms, the conditions that left Thailand exposed. The crisis is new. The underlying problem is not.

Kotchakorn (Build) Khwamchareon is Head of Programs at New Energy Nexus Thailand. New Energy Nexus is a global non-profit supporting clean energy entrepreneurs across more than 14 countries. She works with founders, investors, and policymakers across Thailand to design the conditions for climate technology to scale within emerging economies.