Overview
The ASEAN Power Grid (APG) is a regional initiative to link electricity systems across all ten ASEAN member states, aiming to enhance energy security, support renewable energy use, and strengthen economic integration. With electricity demand in Southeast Asia expected to triple by 2050, the APG enables more efficient power sharing—allowing surplus clean energy from countries like Lao PDR and Malaysia to flow to high-demand economies such as Vietnam, Thailand, and Indonesia.
Progress, however, has been slow. Cross-border trade is still limited, mostly bilateral, and hindered by political, technical, and especially financial challenges. While projects like the Lao–Thailand–Malaysia–Singapore Power Integration Project (LTMS-PIP) show the potential for multilateral trade, many barriers remain.
To address persistent financial constraints and catalyze investment, ASEAN—together with the Asian Development Bank and the World Bank—launched the ASEAN Power Grid Financing Facility (APGF) in 2025. This dedicated platform supports cross-border transmission projects end-to-end, from early feasibility to construction. The APGF aims to unlock regional grid integration through more coordinated, predictable, and accessible financing.
This policy brief reviews the current state of APG development, outlines key challenges, and proposes strategic actions—anchored by the APGF—to accelerate progress toward a unified and sustainable regional power grid.
FRAMING THE VISION OF THE ASEAN POWER GRID
The ASEAN Power Grid (APG) is a flagship regional initiative to interconnect the national electricity networks of all 10 ASEAN countries. Conceived under ASEAN Vision 2020 (formally articulated in 1997), the APG seeks to enable cross-border power trading and “fully integrated grid operations by 2045” (ADB 2025). By linking disparate systems, the APG aims to improve energy security and reliability across a rapidly growing region. It will allow countries with surplus generation (e.g. hydropower in Laos or Malaysia) to export to deficit neighbors, while creating a larger, more stable market for renewable energy (ADB 2025). The APG is expected to ensure reliable electricity for over 670 million people, while accelerating decarbonization by maximizing regional renewables. In ASEAN’s long-term vision, stronger grid links will foster deeper economic integration and energy trade among member states (ADB 2025).
Supporting this vision, ASEAN institutions and development partners have mapped out priority interconnection projects and cooperation frameworks. For example, the Heads of ASEAN Power Utilities/Authorities (HAPUA) and the ASEAN Plan of Action for Energy Cooperation have identified dozens of projects (the ASEAN Interconnection Masterplan Studies, AIMS) to build new high-voltage lines linking countries in sub‐regions (Greater Mekong, Indonesia-Malaysia/Philippines Growth Triangle, etc.). By combining existing bilateral links into a coherent network, these efforts aim to eventually achieve the APG goal by 2045. As one analysis notes, some 18 interconnectors (including subsea links and the longest high-capacity cables planned globally) are envisioned to more than double ASEAN’s transmission capacity by 2040 (Setyawati & Nadhila 2025).
The need for the APG is driven by Southeast Asia’s soaring electricity demand. Energy use in ASEAN is projected to triple by 2050 due to population and economic growth (ADB 2025). Without regional cooperation, this could mean chronic shortages, volatile prices and greater fossil-fuel dependence. Power deficits already affect some countries while others have excess clean energy; a connected grid would allow surplus electricity (often from renewables) to flow where needed, reducing waste and stabilizing supply (ADB 2025). In particular, landlocked and hydropower-rich Lao PDR, Myanmar and parts of Malaysia (Sarawak) hold vast low-carbon potential, while fast-growing economies like Vietnam, Thailand and Indonesia need more supply. By linking them, the APG can “tap low-carbon and renewable energy sources in the region and contribute to economic development and improving energy security” (ADB 2025). In short, the APG is viewed as essential for affordable, reliable, and green power in ASEAN.
Structural Barriers and Strategic Challenges
Despite this promise, delivering the ASEAN Power Grid is a long-term, complex challenges. There are multi-dimensional problems to solve:
● Political/institutional barriers: Member states have differing levels of commitment to cross-border links, often prioritizing national projects over regional ones (ADB 2025). No single ASEAN entity has ultimate authority to coordinate APG planning, so decisions must emerge from consensus. This fragmentation means coordination on policies, standards and priorities is slow and uneven.
● Technical and regulatory hurdles: ASEAN countries have diverse grid systems, codes and grid frequencies. Harmonizing technical standards (voltage, frequency, control systems) and regulatory rules (permitting, tariffs, market rules) is difficult (ADB 2025). Many planned links—especially subsea cables between islands—would be new to the region and require special expertise and multilateral regulation.
● Financing and commercial issues: Large capital is needed to build long-distance lines and upgrade grids. Finding “bankable” commercial agreements for power trading (price formulas, contracts, wheeling tariffs) has proven challenging (ADB 2025). For example, even the first multi-country project saw delays negotiating transmission charges (TransitionZero 2024).
● Market and legal arrangements: Effective cross-border trade demands complex legal frameworks and market mechanisms (e.g. regional electricity exchange, dispute resolution). Establishing these from scratch across four or more countries is arduous (TransitionZero 2024).
These issues mean that, to date, most regional power exchange remains bilateral. ASEAN’s “regional grid” has largely been a vision on paper, only incrementally realized by a series of national and subregional agreements. As one expert summary notes, “the first multilateral arrangement was endorsed in 2014, but only piloted in 2022” (TransitionZero 2024). In practice, each interconnection has required detailed negotiations and task forces (covering technical, legal, tariff matters) among the participating utilities. These foundational barriers constitute the problem facing the APG: while the benefits are clear, unlocking them requires overcoming long-standing institutional and market obstacles across the region (ADB 2025).
Case Study: Lao PDR – Thailand – Malaysia – Singapore (LTMS) Integration
A concrete example of APG in action is the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project (LTMS-PIP). Launched in June 2022, LTMS-PIP is the first multilateral electricity trading project in ASEAN, linking four countries in a single supply chain (Energy Market Authority 2022). Under this arrangement, renewable hydropower from Lao PDR (primarily from existing dams) is sold to Singapore via transmission through Thailand and Malaysia. In practice, Laos transmits power by 230 kV AC line to Thailand (Nam Ngum-5 substation), Thailand uses its existing HVDC back-to-back link to send power onward to Malaysia, and Malaysia then relays the power to Singapore over its grid (Energy Market Authority 2022). Up to 100 megawatts of Lao hydropower can flow to Singapore under the current agreement.
This milestone project involved extensive coordination. National utilities (Lao’s EdL, Thailand’s EGAT, Malaysia’s TNB, and Singapore’s PowerGrid/Keppel Electric) signed power purchase agreements and formed a joint working group with task forces on technical, commercial, legal and tariff issues (Energy Market Authority 2022). Singapore’s Energy Market Authority (EMA) licensed Keppel Electric as the importer, making the June 2022 transaction the city-state’s first-ever renewable energy import (Energy market Authority 2022). The LTMS-PIP is explicitly described as a “pathfinder” for the broader APG vision: it demonstrates that multilateral trading and renewable sharing beyond immediate neighbors is technically and commercially feasible.
Key outcomes of LTMS so far include proving cross-border engineering viability and ironing out legal frameworks. For instance, the project showed that an existing subregional HVDC link (Thailand–Malaysia) could be repurposed for multilateral trade, and that regulatory coordination across four jurisdictions is possible through joint agreements (Setyawati and Nadhila 2025). The project’s success has galvanized follow-up plans: for example, a similar Brunei–Indonesia–Malaysia–Philippines (BIMP-PIP) initiative was announced in 2023 to replicate LTMS’s approach. Singapore’s EMA even projects expanding such imports to as much as 4,000 MW by 2035 through APG links (Setyawati and Nadhila 2025).
Despite the breakthroughs, LTMS also faced challenges emblematic of APG’s problem set. Negotiations over tariff formulas caused one delay in 2024, highlighting the complexity of aligning market rules. Still, as the EMA noted, “the LTMS-PIP demonstrates the feasibility of multilateral power collaboration” and lays groundwork for larger projects. In sum, the LTMS case shows how careful policy design and international cooperation can realize the APG, step by step.
ASEAN Countries and Grid Integration
ASEAN member states differ greatly in their APG engagement, as summarized below. Some (Laos, Thailand, Malaysia, Singapore) are already interlinked through projects like LTMS, while others have only bilateral ties or none. For example, Lao PDR functions as a regional exporter via links to Thailand, Vietnam, Cambodia and Thailand (TransitionZero 2024).
Thailand, in turn, is a major importer with connections to Laos and Malaysia. Singapore’s only interconnection is through Peninsular Malaysia, which it uses to receive Lao hydropower via LTMS (Energy Market Authority 2022). In contrast, Brunei and the Philippines remain largely isolated with no operational cross-border interconnectors, in which both are exploring the Brunei–Indonesia–Malaysia–Philippines Power Integration Project for future links (TransitionZero 2024).
Cambodia and Vietnam have bilateral grid ties, for example Cambodia imports hundreds of MW from Vietnam, Thailand and soon Laos (Varadhan 2024), but no multilateral APG trade. Indonesia spans many islands; it participates in BIMP-PIP planning but has no direct link to the Singaporean grid. Myanmar has limited ties (e.g. import lines from Laos/Thailand) but has not joined any larger APG projects
These differences translate into varied readiness levels (Table 1). Countries like Laos, Thailand, Malaysia and Singapore show high readiness, having established links and joint frameworks like LTMS (Energy Market Authority 2022). Vietnam and Cambodia are moderately ready, with active cross-border trade and expansion plans (Varadhan 2024). By contrast, Myanmar and Indonesia are less integrated, and Brunei/Philippines remain low readiness as they lack active connections (TransitionZero 2024). In all cases, ASEAN’s strategic plans envisage further links (such as undersea cables to Indonesian islands or Vietnam) to raise each country’s participation in the APG.
Table 1: ASEAN member states and their status in the regional power grid (ASEAN Power Grid) integration.
Each country’s level of APG participation reflects geography and policy. In summary, Southeast Asia has made incremental progress: a few multi-country links are now operational, many bilateral arrangements exist, and multiple projects are planned. However, truly multilateral grid integration remains at an early stage. ASEAN’s goal of a unified grid by 2045 will require sustained political commitment, heavy investment and continued expansion of cross-border projects (ADB 2025). The LTMS-PIP shows the way forward, but the coming decades will need further “building block” projects and regulatory harmonization to bring all ASEAN grids into one cooperative network.
References:
Asian Development Bank (ADB) 2024, ADB and the ASEAN Power Grid, ADB Southeast Asia Regional Department, viewed 4 July 2025, https://www.adb.org/where-we-work/southeast-asia/asean-power-grid
ASEAN Centre for Energy (ACE) 2024, ASEAN Power Grid, ASEAN Energy Database, viewed 5 July 2025, https://aseanenergy.org/apaec/asean-power-grid/
BIMP-EAGA 2023, Energy Ministers Push for Expansion of ASEAN Power Grid and Trans-ASEAN Gas Pipeline, BIMP-EAGA, 5 September, viewed 6 July 2025, https://bimp-eaga.asia/article/energy-ministers-push-expansion-asean-power-grid-and-trans-asean-gas-pipeline
Investor Daily 2025, ‘Sumatra–Java interconnection adopts HVDC technology’, PwC Indonesia, 19 June, viewed 6 July 2025, https://www.pwc.com/id/en/media-centre/infrastructure-news/june-2025/sumatra-java-interconnection-adopts-hvdc-technology.html
Shani, N 2023, Status of Southeast Asia Interconnectivity under ASEAN Power Grid, ASEAN Centre for Energy, presented at the Asia Pacific Energy Forum, Bangkok, 16 October, viewed 4 July 2025, https://www.unescap.org/sites/default/d8files/event-documents/Status%20of%20South-East%20Asia%20Interconnectivity%20under%20ASEAN%20Power%20Grid_Nadhilah%20Shani%2C%20ASEAN%20Centre%20for%20Energy.pdf
Ember and RMI 2024, Wired for profit: Grid is the key to unlock ASEAN energy investment, Ember Insights, 7 December, viewed 5 July 2025, https://ember-energy.org
Energy Market Authority (EMA) of Singapore 2022, Singapore commences first renewable energy import via regional multilateral power trade, Media Release, 23 June, viewed 5 July 2025, https://www.ema.gov.sg
TransitionZero 2024, Modelling ASEAN cross-border transmission with TZ-APG, Insights, 2 December, viewed 6 July 2025, https://www.transitionzero.org/insights
Varadhan, S. 2024, Cambodia to boost power import capacity to improve flexibility, Reuters, 21 October, viewed 5 July 2025, https://www.reuters.com/business/energy/cambodia-boost-power-import-capacity-by-over-50-next-two-years-2024-10-21/
