Malaysia Sees Regional Power Trade Back On Track After Thai Leadership Change

Malaysia has said that the renewal of a key Southeast Asian multilateral power trade agreement has been slightly delayed due to recent political changes in Thailand, but the country expects the signing to take place next month. The deal, known as the Lao PDR-Thailand-Malaysia-Singapore (LTMS) Project, is an important cross-border initiative designed to move hydropower generated in Laos through Thailand and into Malaysia, and eventually link with Singapore. According to Malaysia’s Energy Transition and Water Transformation Minister, the delay is temporary and does not reflect any lack of commitment from the participating countries. The minister explained that Thailand is adjusting to a new political situation, which has slowed procedural activities.

Malaysia, currently chairing the Association of Southeast Asian Nations (ASEAN), is pushing to ensure the deal progresses smoothly because it represents a major step toward regional power integration. Officials expect the renewal to be completed in November, after which the second phase of the LTMS project will begin. The initiative is seen as a practical demonstration of how Southeast Asia can move towards a shared electricity market, reduce fossil fuel dependency, and unlock long-term energy security. The minister highlighted that Malaysia is fully committed to the project and views it as a foundation for broader regional cooperation.

The LTMS arrangement is also considered an early building block for the ASEAN Power Grid (APG), a long-standing vision to interconnect all ten ASEAN member states. The APG is increasingly viewed as essential because the region’s energy demand is rising rapidly, driven by industrial activity, urbanisation, and the growth of data centres. Countries across Southeast Asia are under pressure to diversify away from coal, manage rising consumption, and attract sustainable investments. In this context, cross-border power trading is becoming more attractive as it helps balance supply and demand, reduces overall system costs, and increases the share of renewable energy in national power mixes.

The minister also noted that progress is being made on the Borneo Power Grid, another major regional project that aims to link Sabah, Sarawak, Brunei, and eventually parts of Indonesia and the Philippines, and is expected to be connected to Sarawak by the end of the year, while West Kalimantan is already importing electricity from Sarawak. The expansion of these interconnections reflects a broader trend in Southeast Asia, where countries are increasingly looking toward shared infrastructure to support clean energy goals and improve grid reliability.

Malaysia itself is working to reduce its reliance on coal while adding more renewable capacity to meet projected demand growth of 10% in 2026 and 8% in 2027. Much of this increase is expected to come from energy-intensive sectors such as data centres, manufacturing, and digital industries. These trends mirror global patterns, where the rise of artificial intelligence, cloud computing, and semiconductor production is pushing electricity demand sharply upward.

Meanwhile, Laos, which supplies hydropower to several neighbours, is considering reducing electricity supply to cryptocurrency mining operations. The government wants to redirect power to industries that contribute more directly to economic development. This highlights a growing regional debate on how to allocate limited renewable energy resources amid rising demand from both traditional and emerging sectors.

Overall, the temporary delay in renewing the LTMS agreement reflects political timing rather than policy hesitation. With growing attention on clean energy cooperation and rising power demand across Southeast Asia, regional governments are moving steadily toward integrated grids that can support long-term economic and environmental goals.