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THE ASEAN Power Grid (APG) initiative, designed to enhance regional electricity interconnectivity, is projected to require a staggering investment of about RM3,435.94 billion (US$764 billion) for power generation and transmission infrastructure, according to ASEAN Secretary-General Dr Kao Kim Hourn.
In his keynote address on the second day of the ASEAN Investment Conference (AIC), Dr Kao highlighted that the APG aims to address the region’s rising energy demands and expedite the integration of renewable energy sources through cross-border electricity trade.
"This initiative will significantly enhance electricity connectivity across ASEAN, helping to meet our growing energy needs while fostering the transition to renewable energy," Bernama cited Dr Kao saying.
The ASEAN Power Grid, first introduced in 1997, is designed to link the electricity infrastructure of member states to facilitate the regional trade of power. Dr Kao’s comments come on the heels of an announcement from Malaysian Prime Minister Datuk Seri Anwar Ibrahim, who confirmed that the Southeast Asian bloc is in active discussions with investors and multilateral development banks, including the Asian Development Bank (ADB) and the World Bank, to fund the APG’s development.
Anwar, who also serves as Malaysia’s Finance Minister, emphasised the importance of projects such as the electricity transmission from Vietnam to Kelantan via submarine cables, which will then be distributed to Singapore via on-land transmission lines. The financing for such projects is seen as pivotal in powering up the APG.
Looking beyond the APG, Dr Kao also pointed to the region’s broader infrastructure needs. He stated that ASEAN will require approximately US$2.8 trillion in investments by 2030 to meet its decarbonisation commitments, which amounts to an average of US$184 billion annually.
"Given the significant demand for a sustainable future, ASEAN must develop appropriate policies to channel financial resources into sustainability initiatives, including a sustainable investment policy," Dr Kao said.
He further highlighted the ongoing development of the ASEAN Taxonomy for Sustainable Finance, which aims to align the region’s framework with global standards. This, he explained, would provide investors and international donors with clear guidelines to support sustainable investments in ASEAN.
Dr Kao stressed the importance of developing robust financial mechanisms, including capital markets to facilitate sustainable bonds and blended loans, to diversify capital sources from the private sector and international donors.
He also called for enhanced collaboration with international partners to support initiatives like the ASEAN Catalytic Green Finance Facility (ACGF), which is designed to scale up bankable green projects across the region.
In addition to these efforts, ASEAN is focusing on projects that support the growth of green industries, such as electric vehicles (EVs), logistics, sustainable mining, and renewable energy.
As part of these efforts, ASEAN is finalising the Policy Recommendation on Guidelines to Support the ASEAN EV Implementation Roadmap and the ASEAN Sustainable Investment Guideline (ASIG), both of which are slated for completion in 2025.
"These initiatives are critical in shaping national investment and industrial policies that will drive sustainable growth and contribute to the achievement of the Sustainable Development Goals," Dr Kao said. – April 9, 2025