Author: PPD Team Date: 13/05/2025
The Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), and ASEAN Infrastructure Fund (AIF) have signed a letter of intent to collaborate on ASEAN-related infrastructure projects.
The agreement outlines cooperation on high-impact projects, including the ASEAN Power Grid (APG) and ASEAN Catalytic Green Finance Facility (ACGF).
The partnership will focus on project origination, co-financing, technical cooperation, and knowledge sharing. It aims to mobilise joint expertise and financial resources, aligning AIIB and ADB assistance with AIF initiatives.
The APG is a flagship regional initiative launched in the 1990s to interconnect the electricity systems of the 10 ASEAN member states. It aims to reduce power costs, strengthen energy security, and enable clean energy trade across borders. There are currently 13 cross-border lines with 5.2 GW combined capacity. Laos exports power to Thailand, Malaysia, and Singapore, while Thailand and Malaysia maintain steady bilateral exchanges.
The initiative is moving into a new phase, focusing on multilateral interconnections and infrastructure upgrades. A key project under development is the Nusantara Grid in Indonesia, intended to link island-based energy networks.
Recently, ADB pledged up to $10 billion for the APG and a further $27 billion over the next three years to support Southeast Asia’s energy transition. Additional funding can be mobilised as needed.
Challenges remain, including regulatory differences and high infrastructure costs. However, coordinated investments and regional cooperation are expected to help overcome these barriers.