The Risks of Financing Southeast Asia’s Energy Ambitions

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In October 2025, the Asian Development Bank (ADB), World Bank, and the Association of Southeast Asian Nations (ASEAN) officially launched the ASEAN Power Grid Financing Initiative. This initiative launched with the goal of helping “ASEAN’s collective effort to connect the region’s electricity networks and strengthen energy cooperation by 2045,” including ASEAN’s most recent commitment to include domestic network upgrades and subsea power cables within the project scope. This initiative included a $10 billion pledge from the ADB, as well as a $2.5 billion investment from the World Bank, which included trilateral technical assistance.

Yet, this amount only scratches the surface of the estimated $764 billion cost, underscoring the scale of ASEAN’s financing challenge. So, the question remains: how will ASEAN nations make up for the over $740 billion funding gap while balancing regional risks and instability?

In a meeting on financial mechanisms for the ASEAN Power Grid in August 2025, ASEAN energy, finance, and economic ministers noted that, to mobilize investment, further coordination is needed among multilateral development banks, private sector capital, as well as public and private developers. However, as noted by the ministers, this will require clear regulatory frameworks, project pipelines, and consistent policies from all ASEAN member states, something that may be made difficult by recent regional political unrest.

Source: Geographies of Coopration Atlas