ADB, WORLD BANK LAUNCH ASEAN POWER GRID FINANCING INITIATIVE

KUALA LUMPUR, Oct 15 (Bernama) -- The Asian Development Bank (ADB) and the World Bank Group, in partnership with ASEAN, today launched the ASEAN Power Grid (APG) Financing Initiative to support the development and integration of national power grids across the region.

ADB South Asia Development Director General Winfried F. Wicklein said the bank has committed US$10 billion to finance ASEAN grids linked to the APG, alongside clean energy generation projects and preparatory support such as loans, grants, technical assistance, and blended financing.

“Some of the generation infrastructure will have to be built, including clean energy generation. We are also working on project preparation through lending, project preparation loans, grants, and blended financing, bringing partners together,” he told reporters after the ASEAN Energy Business Forum here today.

Wicklein said the initiative is gaining momentum through collaboration among ASEAN member states, financiers, and project developers, with multiple feasibility studies already under way.

“ASEAN has its own power generation from different sources, ranging from coal to renewables, but the ASEAN Power Grid’s strong focus is on clean energy,” he said.

During her presentation, 'Financing the APG: Unlocking Investments through the APG Financing Initiative', World Bank practice manager for Energy and Extractives, East Asia and Pacific Region, Claudia Vasquez, said ASEAN’s master plan now focuses on strengthening national grid capacity, transitioning to clean energy generation, and expanding interconnections, including proposed subsea cable projects.

She noted, however, that the initiative must overcome several key challenges, including large funding requirements for project preparation, coordination gaps, limited project data, and the need for sustained commitment from ASEAN member states.

Earlier, Deputy Prime Minister and Minister of Energy Transition and Water Transformation (PETRA) Datuk Seri Fadillah Yusof witnessed the exchange of a memorandum of understanding (MoU) between ADB and the World Bank for the APG Financing Initiative.

The World Bank has yet to disclose the total amount of its commitment to the initiative.

In his opening remarks, Fadillah said ASEAN has identified the APG as one of the region’s most strategic energy cooperation efforts, crucial for enhancing energy security and expanding renewable energy adoption.

“Financing the APG matters because it is the foundation upon which our energy ambitions are built. Without adequate and innovative financing mechanisms, even the most promising projects may stall.

“We must mobilise both public and private capital, de-risk investments, and create enabling environments that attract long-term commitments,” he said.

The APG aims to establish a regional power interconnection, initially through cross-border bilateral links, before expanding to sub-regional networks and ultimately forming a fully integrated South East Asian power grid.

As one of the flagship energy infrastructure projects under the Master Plan on ASEAN Connectivity, the APG is expected to enhance cross-border electricity trade, meet rising power demand, and improve access to energy services across the region.

-- BERNAMA