Wedoany.com Report-Oct. 22, The World Bank, Asian Development Bank (ADB), and the Association of Southeast Asian Nations (ASEAN) have announced a joint financing initiative to advance the ASEAN Power Grid (APG), a project aimed at connecting Southeast Asian nations by 2045. The ASEAN Power Grid Financing Initiative (APGF) will mobilize large-scale funding for cross-border electricity interconnections, both overland and via subsea cables, and support the development of a pipeline of APG-related projects. The initiative also enables ASEAN’s national utilities and project sponsors to request targeted project support.

ADB has pledged up to $10 billion over the next decade, complemented by $6 million in initial technical assistance funded by ADB, the United Kingdom, the European Union, and other partners. The World Bank is contributing an initial $2.5 billion, including a $12.7 million seed grant to the ASEAN Centre for Energy (ACE), which will fund the preparation of bankable projects and define subsequent phases of support.

Both institutions will provide technical assistance for project preparation and capacity building, as well as a full range of financial instruments, including grants, concessional and regular loans, guarantees, political risk coverage, advisory services for public–private partnerships, and equity investments.

Scott Morris, ADB Vice-President for East and Southeast Asia and the Pacific, said: “The APG presents an extraordinary opportunity to meet Southeast Asia’s growing energy needs. We’re committed to building a coalition of governments, utilities, investors, and innovators – united by a shared commitment to regional energy integration – to deliver lasting benefits for generations to come.”

An interconnection masterplan study estimates $764 billion is required for transmission infrastructure and power generation to support the APG, including significant integration of variable renewable energy sources. ACE Executive Director Dato’ Ir. Ts. Razib Dawood noted that ASEAN currently has 7.7 GW of cross-border interconnection capacity, which must more than double by 2040 to meet regional growth targets.

At the recent ASEAN Ministers on Energy Meeting in Laos in September, officials agreed that the APG should not only prioritize cross-border interconnections but also focus on upgrading domestic grid networks and developing subsea power cables.

A recent report by the International Energy Agency highlighted that integrating solar and wind energy across Southeast Asia will be essential to satisfy the region’s rising electricity demand. The APG initiative is expected to enhance energy security, support renewable energy adoption, and facilitate greater regional cooperation in electricity trade, paving the way for a more resilient and interconnected Southeast Asian energy market.

Through the APGF, the World Bank, ADB, and ASEAN aim to combine technical expertise, financial support, and policy coordination to accelerate the development of a modern, sustainable, and regionally integrated power grid, benefitting both governments and local communities across Southeast Asia.