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FIRST proposed in the late 1990s, the Asean Power Grid (APG) was envisioned as a long-term solution to energy security and sustainability through multilateral electricity trading. Today, only seven out of the 16 planned interconnections are operational.
The APG is the key interconnection of power systems for Asean countries to trade cross-border electricity. On paper, it’s an ambitious plan.
In practice, it faces considerable headwinds – not only from the lack of technology or investment, but also from fragmented regulatory regimes, uneven political will and deep-rooted concerns about sovereignty and national energy security.
Countries at different stages of economic development and energy transition often hold contrasting views.
Energy-exporting countries worry about undervaluation of their power exports. Energy-importing countries hesitate to rely on neighbours for something as strategic as electricity.
“To unlock the full potential of the APG, a coordinated, trust-based approach is needed. One that embraces regional diversity but works toward common goals,” says Solarvest executive director and group chief executive officer Davis Chong.
Making the APG a reality: four strategic imperatives
Strategy 1: Harmonise regulatory and market frameworks
Asean countries must develop shared technical standards, grid codes, pricing mechanisms and regulatory norms to enable seamless cross-border power exchange.
Is it being done? Partially. The Asean Power Grid Consultative Committee (APGCC) has initiated discussions and studies on regulatory harmonisation, with some technical standards and bilateral power trading agreements in place.
This includes the ongoing policy dialogues under the Asean Plan of Action for Energy Cooperation (APAEC) Phase II (2021-2025), and a sub-programme on regional power market development.
Chong: to unlock the full potential of the asean Power Grid, a coordinated, trust-based approach is needed.
However, some governments find it challenging to adjust their domestic electricity subsidies or tariff to align with regional trading models; some may lack the resources to participate fully.
“Asean’s energy future depends on how quickly public-private trust is built.
“When industry is invited to co-create, not just implement, we see faster results and deeper regional alignment. What’s missing is a structured platform for continuous engagement between governments and private developers,” he said.
Strategy 2: Institutionalise public-private collaboration
Governments must establish transparent and structured platforms to involve industry consultation as early as grid planning and policy design, along with formal mechanisms that enable energy authorities and private companies to co-invest in and co-develop clean energy infrastructure.
Private sector players like Malaysia’s Solarvest, with proven experience in cross-border solar development, are already collaborating with national and regional institutions to fast-track clean infrastructure deployment across South-East Asia.
Their participation in clean energy initiatives aligned with the Asean Interconnection Masterplan exemplifies how public-private partnerships can be effectively operationalised at scale.
With their technical expertise, financial strength and operational agility, these private companies can significantly accelerate the implementation of the Asean Power Grid.
Strategy 3: Prioritise regional grid modernisation and digitalisation
Advanced energy management systems like smart grids and AI-driven monitoring are key to balancing intermittent renewables and enabling reliable cross-border power trading.
This is an area where private companies can provide valuable solutions through innovation and operational experience.
Countries like Singapore, Malaysia and Thailand are advancing smart grid projects and integrating distributed energy systems.
However, regulatory bodies in countries like Cambodia, Myanmar or Laos may lack the resources or technical capacity to participate fully, largely due to cost and infrastructure gaps.
Smart grid technologies are capital-intensive.
Countries with limited fiscal space often struggle to invest at scale, resulting in fragmented digital platforms that complicate regional integration.
Solarvest, which has invested and brought clean energy expertise to various Asean country showcases how successful public-private partnerships that bridge the investment and capability gaps.
Strategy 4: De-risk cross-border power projects through bilateral/multilateral mechanisms
“Policy without execution leads to bottlenecks. That’s where regional developers and clean energy investor like us can play a critical role to translate high-level energy plans into bankable, buildable clean infrastructure,” says Chong.
The absence of centralised Asean mechanism or standardise project finance tools continues to limit project bankability.
Clean energy projects often lack long-term offtake agreements, regulatory clarity or sovereign guarantees – deter investors. Hence, feasibility studies and pilot projects such as the Asean Interconnection Masterplan Study (AIMS) III and the Laos-Thailand-Malaysia-Singapore (LTMS-PIP) pilot projects are important.
Countries are more likely to participate when risks are mitigated. Institutions like the Asian Development Bank (ADB) and the Asean Infrastructure Fund (AIF) can help de-risk early-stage cross-border power infrastructure via blended finance, sovereign guarantees or risk-sharing instruments.
Malaysia: A blueprint worth studying
Asean needs not just cross-border grids, but cross-border knowledge transfer. Malaysia offers a compelling case study of how enabling policies and private sector engagement can move the needle on clean energy.
The National Energy Transition Roadmap (NETR) outlines clear investment pathways toward a greener grid, including large-scale solar, hydrogen development and energy efficiency.
Under the Corporate Renewable Energy Supply Scheme (CRESS), it enables third-party grid access and serves as a potential catalyst for cross-border electricity trading.
Additionally, Malaysia has successfully implemented cross-border energy exports, such as to Singapore through the LTMS interconnection.
This serves as a proof-of-concept that regional energy trading is technically viable and politically achievable.
A decade of promise, need of delivery
The APG is not simply about building power lines across borders. It is about building trust, interdependence and a shared commitment to Asean’s sustainable future.
For Asean to rise as a climate-resilient economic bloc, governments, industries and communities must sit at the same table as collaborators for the delivery of the APG.
About Solarvest Holdings Bhd
Solarvest is a regional clean energy infrastructure developer, with presence across eight Asia-Pacific countries, including Malaysia (“HQ”), Singapore, Vietnam, Taiwan, Indonesia, Thailand, Brunei, and the Philippines.
Recognised for its leadership in the solar industry, Solarvest has expanded its expertise to support clean energy transformation, offering a comprehensive suite of advanced solutions including Energy Storage, Energy Efficiency, Renewable Energy Certificates, and more.
To date, Solarvest has developed more than 2,000 MWp of projects across the region.
Solarvest is listed on the Main Market of Bursa Malaysia.
For more information, log on to https://solarvest.com.
