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ASEAN Power Grid

Energy and Regional Cooperation

The Association of Southeast Asian Nations (ASEAN) Power Grid is a major initiative designed to connect the electricity networks of ASEAN's 10 member countries, enabling fully integrated grid operation by 2045. ADB is working with development partners to establish dedicated financing solutions for the initiative.

ADB, World Bank Group, ASEAN Launch the ASEAN Power Grid Financing Initiative

ADB, the World Bank, and ASEAN have established the ASEAN Power Grid Financing Initiative (APGF) to mobilize large-scale funding for cross-border power interconnections across land and on the seabed.

The two banks will offer financing from their own balance sheets and catalyze funds from other organizations to take projects from concept to completion.

APGF will help develop a strong pipeline of APG-related projects and enable ASEAN’s national utilities and sponsors to request project-specific support from a community of financiers – including international financial institutions, donors, commercial banks, and philanthropies.

  • The ASEAN power grid will improve energy security, strengthen resilience of the overall energy system, and promote the region's decarbonization.

  • Delivering the ASEAN Power Grid is a complex, long-term task that requires strong and strategic partnerships.

  • ADB is uniquely positioned to support the ASEAN Power Grid.

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"The ASEAN Power Grid 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."

ADB Vice-President Scott Morris

ADB, World Bank Group, ASEAN Launch the ASEAN Power Grid Financing Initiative

ADB, the World Bank, and ASEAN have established the ASEAN Power Grid Financing Initiative (APGF) to mobilize large-scale funding for cross-border power interconnections across land and on the seabed.

The two banks will offer financing from their own balance sheets and catalyze funds from other organizations to take projects from concept to completion.

APGF will help develop a strong pipeline of APG-related projects and enable ASEAN’s national utilities and sponsors to request project-specific support from a community of financiers – including international financial institutions, donors, commercial banks, and philanthropies.

Understanding the ASEAN Power Grid

The ASEAN Power Grid is a major initiative designed to connect the electricity networks of the 10 members countries of ASEAN, enabling cross-border power trading. ASEAN’s vision is to achieve fully integrated grid operations by 2045. The initiative will ensure a reliable energy supply, maximize the use of renewables, and support affordable electricity for more than 680 million people living in the region.

Why is it important?

Southeast Asia’s energy demand is expected to triple by 2050, fueled by population growth and economic expansion. Without action, the region could face power shortages, higher electricity costs, and increased dependence on fossil fuels. Given that some ASEAN countries have surplus energy while others face shortages, a regional grid would enable efficient power sharing ensuring a more reliable and balanced energy supply. It will also help the region maximize its renewable energy resources by creating a larger, more stable market for clean energy producers.

How does it contribute to ASEAN’s regional integration?

The ASEAN Power Grid plays a key role in advancing regional integration by connecting the power systems of member countries. The ASEAN Power Grid will foster stronger economic ties through regional energy trade while facilitating the integration of diverse energy sources, including vast renewable energy resources available in the region.

What challenges does the ASEAN Power Grid face?

APG has several challenges.

These include political challenges in the form of varying levels of commitment and coordination among ASEAN Member States and a tendency to prioritize domestic over regional interconnections. There are institutional challenges given the absence of a coordinating entity for APG development.

Technical and commercial challenges emerge in the form of limited regulatory harmonization, permit and license requirements, bankable commercial agreements, and technical capacity. Many future interconnections involve a subsea cable component for example, which would be new to the region and costly, requiring specialized technical expertise and regulatory frameworks.

And there are financing challenges, given the substantial funding required for early-stage project preparation, de-risking, and capital investment at scale.

This means delivering the ASEAN Power Grid is a complex, long-term task that requires strong and strategic partnerships. It requires collaboration at all levels - between countries, private sector, financiers, and development partners. And it begins with well-coordinated bilateral and subregional interconnection projects as a building block.

What role does ADB play?

ADB is advancing the ASEAN Power Grid by providing a mix of financial and technical support. At ASEAN's request, ADB is working alongside the World Bank and other development partners to establish a dedicated APG financing initiative.

ADB has also launched a 4ドル.2 million Technical Assistance facility, with support from the United Kingdom and the European Union as well as ADB’s multi-donor Clean Energy Fund under the Clean Energy Financing Partnership Facility and High Level Technology Fund, to help ASEAN accelerate its energy transition and increase regional power trade.

What types of energy are included?

The ASEAN Power Grid incorporates both renewable and non-renewable energy sources, depending on each country’s available resources and trading agreements.

ASEAN countries’ future power development plans aim to significantly scale up renewable energy, much of which remains untapped and unevenly distributed across the region. Maximizing this will require countries to put in place stronger and many more interconnections, along with flexible and real-time power trade arrangements. Doing so will enable clean energy to be delivered to high demand centers and surplus energy to be shared, addressing unexpected shortages.

Hydropower from Lao PDR, Myanmar, and Sarawak (Malaysia) will continue to serve as key export sources. Meanwhile, the rapid expansion of solar and wind across region, including significant offshore wind potential in Viet Nam and the Philippines, presents new opportunities to enhance the region’s renewable energy utilization, combined with rich and reliable hydropower resources. Projects like battery storage and pumped hydro are being explored to help manage these energy sources.

Non-renewable energy sources, such as natural gas, remain a key component of the grid during the transition period, particularly in Thailand, Indonesia, and Malaysia. Although coal-fired power remains in use in some ASEAN countries, efforts are underway to transition toward cleaner alternatives.

Further, Singapore’s clean energy procurement (6 GW) is driving new interconnection projects led by the private sector, to source 100% clean energy from neighboring countries.

Given this background, the share of renewable energy in APG is likely to increase over time.

By the Numbers

  • 17.6 gigawatts

    target transmission capacity by 2040

    Learn more

    The ASEAN Interconnector Masterplan Study III identified 18 new and existing interconnectors to more than double interconnector capacity from the current 7.7 gigawatts by 2040.

    Several proposed ASEAN Power Grid subsea interconnectors would be the longest to date, and among the largest in terms of capacity for subsea projects, globally.

  • over $ 100 billion

    needed in transmission infrastructure investments from both public and private sectors

    Learn more

    Annual investments in energy transmission infrastructure are expected to more than double by 2035, with transmission lines alone accounting for up to half of total grid spending. Over the next two decades, ADB estimates that ASEAN will need more than 100ドル billion in transmission infrastructure investments, including both domestic and cross-border projects.

  • over 680 million

    people with more affordable electricity

What's Next

ADB is committed to driving the ASEAN Power Grid forward through engagement with three sets of partners

  • ASEAN Institutions and Member States

    ADB collaborates with ASEAN's energy and finance initiatives, in response to requests, alongside the World Bank and other partners, to align with priorities outlined in the ASEAN Infrastructure Fund Action Plan.

  • Utilities and Project Developers

    ADB supports project preparation and financing by working closely with utilities and developers, addressing the demand for capital to bring grid projects to fruition.

  • Financing and Delivery Partners

    ADB fosters partnerships with funders, donors, commercial banks, and development partners, emphasizing thought leadership on green grids and leveraging opportunities like the Green Grid Initiative to catalyze investment.

Resources

ADB-Financed Projects
Project Title Project Description

Lao People's Democratic Republic: Monsoon Wind Power Project (nonsovereign loan)

  • ADB resources: 110ドル million
  • Approval date: 3 November 2022
  • Signing date: 25 February 2023
 The project entails a wind power project with a contracted capacity of 600-megawatt (MW) to be constructed in Lao PDR that will export and sell electricity into neighboring Viet Nam. It will be the first wind power project in Lao PDR, the largest in Southeast Asia, and the first cross-border in Asia. The project will provide a substantial source of clean renewable energy supply to Viet Nam to help meet the country's growing energy demand. The project will help unlock Lao PDR's significant untapped wind resource potential and provide social and economic benefits to the country in the form of employment, improved infrastructure, increased regional connectivity, and revenues through collection of royalties, lease payments, and taxes.

Indonesia: West Kalimantan Power Grid Strengthening Project (sovereign loan)

 The project is perfectly aligned with ADB's Energy Sector Assessment Strategy and Roadmap, which supports investment in strategic transmission assets that connects regions or countries across seas or international boundaries to optimize power networks by reducing the overall need for reserve capacity, improving system reliability, removing transmission bottlenecks, and transmitting cheaper power from one area to the other, addressing overall regional socio-economic and environmental improvement.

Loan 846/1063-LAO: Xeset Hydropower Project (sovereign loan)

More details
  • ADB-approved financing: 15ドル.5 million
  • Period: 25 February 1988 to 30 June 1992
  • Executing agency: Electricité du Laos
 The Xeset hydropower plant (45 MW), run-of-river dam, has exported 40% of the generated power to Thailand and used the rest for domestic consumption.

Loan 1214-LAO: Nam Song Hydropower Development Project (sovereign loan)

More details
  • ADB-approved financing: 31ドル.5 million
  • Period: 13 April 1993 to 21 April 1997
  • Executing agency: Electricité du Laos
 A concrete weir 21 m in height was constructed on the Nam Song river to divert water into the existing Nam Ngum reservoir to generate additional 137 GWh power at Nam Ngum power plant for export to Thailand. In addition, three local villages were electrified.

Loan 1329-LAO: Theun–Hinboun Hydropower Project (sovereign loan)

More details
  • ADB-approved financing: 60ドル million
  • Period: 8 November 1994 to 14 October 1998
  • Executing agency: Theun–Hinboun Power Company Limited
 The Lao PDR’s first joint venture hydropower project with the private sector supports the country’s economic growth by increasing foreign exchange earnings through export of electricity to Thailand. It entailed the construction of a 210 MW hydropower plant and related power transmission line to Thailand.

Loan 1456-LAO: Nam Leuk Hydropower Project (sovereign loan)

More details
  • ADB-approved financing: 52ドル million
  • Period: 10 September 1996 to 13 March 2003
  • Executing agency: Electricité du Laos
 The Nam Leuk hydropower plant (60 MW) exported its total capacity to Thailand until the electricity produced was needed for domestic use in 2007. Since then, all generated electricity has been used for domestic consumption.

Loan 2052-CAM: GMS Transmission Project (sovereign loan)

More details
  • ADB-approved financing: 44ドル.3 million
  • Period: 15 December 2003 to 31 December 2010
  • Executing agency: Electricité du Cambodge
 The construction of a 109 km, 230kV transmission line, associated substations and distribution facilities from the Vietnamese border to Phnom Penh allows Electricité du Cambodge to import up to 200 MW capacity power from Viet Nam.

Loan 2162-LAO: Nam Theun 2 Hydroelectric Project (sovereign loan)

More details
  • ADB-approved financing: 20ドル million
  • Period: 4 April 2005 to 2 February 2011
  • Executing agency: Lao Holding State Enterprise

Loan 7210-LAO (nonsovereign loan)

  • ADB-approved financing: 50ドル million
  • Period: 4 April 2005 to 3 October 2010
  • Executing agency: Nam Theun 2 Power Company Limited

Political Risk Guarantee

  • ADB-approved financing: 50ドル million
  • Period: 4 April 2005 to 3 October 2010
  • Executing agency: Nam Theun 2 Power Company Limited
 Nam Theun 2 hydropower plant (1,070 MW) generates revenues by exporting 1,000 MW power to Thailand to finance poverty reduction and environmental programs in the Lao PDR and by supplying 70 MW power for domestic use.

Loan 2818/2819-LAO: Greater Mekong Subregion Nam Ngum 3 Hydropower Project (sovereign loan)

More details
  • ADB-approved financing: 115ドル.1 million
  • Period: It was approved in November 2011 but cancelled in November 2013
  • Executing agency: Lao Holding State Enterprise

Loan 7341-LAO (nonsovereign loan)

  • ADB-approved financing: 350ドル million
  • Period: It was approved in November 2011 but cancelled in January 2013
  • Executing agency: Nam Ngum 3 Hydropower Company
 Nam Ngum 3 hydropower plant (440 MW) was planned to be developed for export to Thailand. However, tariff negotiations with Electricity Generating Authority of Thailand prolonged longer than anticipated. As a result, the government decided not to develop the project and consequently, the approved loan was cancelled.

Loan 3153/3154-LAO: Nam Ngiep 1 Hydropower Project (sovereign loan)

More details
  • ADB-approved financing: 144ドル million
  • Period: It was approved in August 2014. The implementation is envisaged until January 2019
  • Executing agency: Nam Ngiep 1 Power Company Limited
 Nam Ngiep 1 hydropower plan (290 MW) will be constructed: 272 MW for export to Thailand and 18 MW for domestic use. A 125 km, 230 kV transmission line will also be constructed to connect the power station to the Nabong substation near Vientiane.

G0195-LAO: GMS Northern Power transmission Project

More details
  • ADB-approved financing: 20ドル million
  • Period: 23 November 2010 to 30 June 2016
  • Executing agency: Electricité du Laos
 The project aims to (i) construct 398 km of 115 kV transmission line with associated 115/22 kV substation and about 1,100 km of 22 kV new feeders; (ii) provide no-interest credit for power to poor households; (iii) provide consulting services for supporting energy efficiency and conservation program; and (iv) increase access to two-way power trade between the Lao PDR and Thailand.
External Resources

Contacts

  • Regional-Owned Financing Partnerships

    Partnerships—with regional ownership—are core to ADB’s support to regional initiatives.

    One key example is the ASEAN Infrastructure Fund (AIF), whose shareholders include all 10 members of ASEAN as well as ADB. With a total paid equity of nearly 500ドル million, the AIF is ASEAN's largest financing initiative for infrastructure based on member countries' contributions. To date, the AIF has catalyzed financing to nearly 9ドル billion of projects, with a focus on energy, transport, urban, and water sectors.

    AIF’s cofinancing program, the ASEAN Catalytic Green Finance Facility (ACGF), further leverages AIF’s own resources by mobilizing 1ドル.9 billion in additional funding pledges from global partners, including access to concessional loans and project preparation grants. As administrator of AIF and ACGF, ADB is working with AIF shareholders and partners to raise new funds for APG and other cross-border projects.

  • Monsoon Wind: Pioneering Cross-Border Clean Energy with Bankable Risk Solutions

    The 600 MW Monsoon Wind project—the largest wind power project in Southeast Asia and the first in Lao PDR—will export electricity to Viet Nam under a 25-year PPA with EVN. The project will generate ~1,700 GWh annually, it will avoid around 600,000 tons of CO2 emissions per year.

    ADB anchored the project’s 692ドル.55 million financing through an innovative blended finance structure that directly tackled the biggest bankability hurdle: curtailment risk. While EVN can curtail output under certain technical conditions, ADB and partners structured a two-tier curtailment buffer:

    • A 30ドル million curtailment loan facility (via LEAP and CFPS) to absorb ordinary curtailment impacts; and
    • A 30ドル million reserve (via CFPS II and a 10ドル million ADB grant) to cover extreme or one-off curtailment events.

    This structure ensures debt can still be serviced even during disruptions—making the project bankable for commercial lenders. Monsoon Wind demonstrates how contractual innovation, public-private coordination, and development finance can unlock cross-border IPP projects—offering a template for both IPP-to-grid and future grid-to-grid transactions under the ASEAN Power Grid.