World Bank, ADB Launch Financing Initiative for ASEAN Power Grid Development

The World Bank, Asian Development Bank (ADB), and the Association of Southeast Asian Nations (ASEAN) have jointly announced a financing initiative to support the ASEAN Power Grid (APG), a project targeting regional electricity interconnection among Southeast Asian nations by 2045.

The ASEAN Power Grid Financing Initiative (APGF) aims to mobilize large-scale funding for cross-border power interconnections, both overland and subsea, and to develop a pipeline of APG-related projects. The initiative will also enable national utilities and project sponsors to request tailored support for specific projects.

Funding Commitments

ADB has pledged up to $10 billion over the next decade, supported by an initial $6 million in technical assistance funded by ADB, the United Kingdom, the European Union, and other partners.

The World Bank will provide an initial $2.5 billion, including a $12.7 million seed grant to the ASEAN Centre for Energy (ACE) for project preparation and planning the next phase of support.

Both institutions will offer technical assistance, capacity building, and a comprehensive range of financial instruments, including grants, concessional and commercial loans, guarantees, political risk coverage, public–private partnership advisory services, and equity funding.

Strategic Importance
ADB Vice-President for East and Southeast Asia and the Pacific, Scott Morris, said the APG presents “an extraordinary opportunity to meet Southeast Asia’s growing energy needs,” emphasizing collaboration among governments, utilities, investors, and innovators.

An interconnection masterplan study estimates that $764 billion in investment will be required to build the transmission and generation infrastructure needed, including high levels of variable renewable energy.

Regional Energy Outlook
Currently, ASEAN has 7.7 GW of cross-border interconnection capacity, which, according to ACE Executive Director Dato’ Ir. Ts. Razib Dawood, must more than double by 2040 to meet regional growth targets.

At the recent ASEAN Ministers on Energy Meeting in Laos, officials agreed that the APG should not only focus on cross-border connections but also address domestic grid upgrades and subsea power cable development.

A report from the International Energy Agency highlights that integrating solar and wind energy across Southeast Asia will be crucial to meet the region’s rising electricity demand.