International Funding Commitment: ADB and WB Put Forward Over 12 Billion USD Towards ASEAN's Power Grid and Renewable Energy Initiatives
The ASEAN Power Grid Financing Initiative (APGF) has received a significant boost, with pledges totaling over 12 billion USD from the Asian Development Bank (ADB) and the World Bank (WB). This financing initiative is a crucial step towards the development of the ASEAN Power Grid (APG), a flagship project aimed at interconnecting national grids across the ASEAN region.
The APG's objective is twofold: to improve energy security, diversify supply sources, optimize resource use, and foster cross-border electricity trade, thereby promoting sustainable industrial growth and strengthening energy security in the region. The APG is a key component of the upcoming ASEAN Plan of Action for Energy Cooperation 2026-2030.
The APGF serves as a platform to coordinate and mobilize funding for cross-border power projects within the ASEAN region. The ADB is ready to invest up to 10 billion USD of its own resources over the next decade in support of the APG. The World Bank, on the other hand, will invest through its "Accelerating Sustainable Energy Transition Multi-Phase Programmatic Approach (ASET-MPA)" programme, approved in 2024, to ramp up renewable energy and promote power trade across the region.
The commitment was announced at the Ministerial Interface Meeting on Financial Mechanisms for the ASEAN Power Grid (APG), which was attended by ministers of economy and energy, and central bank governors from all 10 ASEAN members and Timor-Leste. The meeting also considered steps to attract global capital for the APG and discussed inter-sectoral coordination, reviewed the APGF implementation plan presented by ADB and WB, and explored ways each sector could contribute to financing and advancing regional energy connectivity.
Vietnam's Deputy Minister of Industry and Trade, Nguyen Hoang Long, stressed that Vietnam will continue to explore proposals, exchange information, and seek cooperation opportunities aligned with its development priorities to advance cross-border power connectivity. This commitment underscores the collective effort of ASEAN members to foster regional energy integration and to meet the region's increasing energy demands in a sustainable and efficient manner.
The APGF's role extends beyond just financial backing. It also aims to facilitate policy and technical guidance, ensuring that the APG is developed in a way that supports ASEAN's broader energy and economic objectives, such as promoting renewable energy and reducing regional development gaps.
With this significant funding commitment, the APGF is poised to play a pivotal role in overcoming financial constraints and catalyzing investment in cross-border transmission projects, thereby facilitating more efficient energy sharing and promoting renewable energy use in the region. The conclusion of the meeting was marked by a joint press statement affirming the APG's role in enhancing economic competitiveness, driving sustainable industrial growth, and strengthening energy security.
[1] ASEAN Power Grid Financing Initiative (APGF) Fact Sheet. (n.d.). Retrieved from https://www.adb.org/sites/default/files/publication/641338/apgf-fact-sheet.pdf
[2] World Bank Group. (2021, October 12). ASEAN Power Grid: A new era of energy cooperation. Retrieved from https://www.worldbank.org/en/news/press-release/2021/10/12/asean-power-grid-a-new-era-of-energy-cooperation
[3] ASEAN Power Grid Financing Initiative (APGF) - Investing in a Sustainable Future. (n.d.). Retrieved from https://www.adb.org/projects/asean-power-grid-financing-initiative-apgf-investing-sustainable-future
- The ASEAN Power Grid (APG) aims to promote sustainable industrial growth by optimizing resource use, fostering cross-border electricity trade, and reducing regional development gaps, backed by the ASEAN Power Grid Financing Initiative (APGF).
- The World Bank is invested in promoting power trade across the ASEAN region through its "Accelerating Sustainable Energy Transition Multi-Phase Programmatic Approach (ASET-MPA)" programme, which focuses on renewable energy.
- Vietnam, a member of the APGF, plans to continue exploring cooperation opportunities to advance cross-border power connectivity, with a commitment to promoting renewable energy and reducing development gaps in alignment with its development priorities.
