The Asian Development Bank and World Bank have jointly launched a major financing initiative to support the development of the ASEAN Power Grid, a transformative cross-border energy infrastructure project aimed at integrating national power grids across Southeast Asia. According to Malaysian state news agency Bernama, the initiative will play a critical role in driving the region’s clean energy transition and enhancing energy security.
The ADB is committing $10 billion in financing to support the construction and expansion of power grids linked to the ASEAN Power Grid, as well as related clean energy projects across the region. The announcement was made by Winfried F. Wicklein, Director General of ADB’s South Asia Development, highlighting the strategic importance of cross-border power connectivity to support sustainable economic growth.
The financing program aims to help countries in the Association of Southeast Asian Nations accelerate investment in renewable energy, upgrade transmission infrastructure, and build an interconnected regional electricity market. By enabling power sharing and cross-border electricity trade, the ASEAN Power Grid is expected to enhance energy security, reduce costs, and support the decarbonization of the region’s energy mix.
The ASEAN Power Grid is one of the region’s most ambitious energy initiatives. It envisions linking national grids through a network of cross-border interconnections, allowing countries to optimize power generation, balance supply and demand, and improve system resilience. This integrated approach will enable participating nations to reduce reliance on fossil fuels and increase the share of renewable sources, such as solar, wind, and hydropower.
The World Bank is expected to play a pivotal role in mobilizing additional investments and providing technical expertise to accelerate project implementation. This includes co-financing, guarantees, and policy support to create an enabling environment for private sector participation. The financing initiative is expected to crowd in billions more from institutional investors, sovereign wealth funds, and green financing instruments.
Southeast Asia faces a dual challenge of meeting rising energy demand while advancing its climate commitments. Regional power demand is projected to grow steadily over the next decade, driven by rapid urbanization, industrialization, and economic growth. At the same time, governments across ASEAN have pledged to increase the share of renewables in their energy mix to reduce carbon emissions.
The ASEAN Power Grid initiative directly supports these goals by allowing countries with surplus renewable capacity to export electricity to neighbors with higher demand, creating a more efficient and balanced energy ecosystem. It also provides a pathway for energy transition without compromising reliability or affordability.
Experts believe the financing partnership between ADB and the World Bank could be a game-changer for clean energy development in the region. By providing large-scale funding, the initiative addresses a key bottleneck that has historically slowed down cross-border energy projects: access to affordable capital.
The project also aligns with global efforts to accelerate clean energy investment ahead of the 2030 sustainability goals. It is expected to attract strong interest from governments, development partners, and private investors looking to participate in Asia’s growing energy transition market.
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