World Bank Expands Support for ASEAN Power Grid with New $7.7M Grant to ACE

The World Bank has approved an additional $7.7 million grant to the ASEAN Centre for Energy (ACE), furthering efforts to build a fully integrated, cross-border energy network among ASEAN member states. This new funding, sourced from the International Development Association (IDA), supplements a previous $5 million grant approved in September 2024, bringing total World Bank support for the initiative to $12.7 million under the $2.5 billion Accelerating Sustainable Energy Transition (ASET) program.

This financing package strengthens the regional momentum behind the long-term ASEAN Power Grid (APG) initiative, a centerpiece of the ASEAN Vision 2020 and slated for full operationalization by 2045. The APG seeks to improve energy security, lower emissions, and foster economic integration across the 10-member ASEAN bloc.

Enabling a Resilient and Renewable Energy Future

An integrated regional grid would unlock vast renewable energy potential—particularly solar and wind—across Southeast Asia’s diverse geography. It would also enhance affordability, flexibility, and resilience in national power systems, mitigating the effects of demand fluctuations and extreme weather events.

"An integrated energy grid will increase reliability, affordability, flexibility, and resilience of power systems and leverage the region’s diverse energy sources, such as wind and solar," said Manuela Ferro, World Bank Regional Vice President for East Asia and the Pacific.

Deepening Technical and Institutional Capacity

The grant will fund the establishment of a Project Preparation Facility within ACE to support the ASEAN Power Grid’s development pipeline. Key activities include:

• Supporting technical feasibility studies, such as the ASEAN Interconnection Masterplan Study (AIMS);

• Providing transaction advisory services to help structure regional energy deals;

• Coordinating with private sector partners and multilateral donors to assemble financing packages;

• Enhancing ACE’s institutional capacity to manage growing demand for cross-border electricity trade.

This initiative aligns closely with the ASET Multi-Phase Program Approach (MPA), which aims to fast-track decarbonization, expand renewable energy deployment, and strengthen regional energy markets through collaborative policy and investment platforms.

A Step Toward ASEAN’s Energy Unity

The ASEAN Power Grid represents a transformative vision for Southeast Asia—one where countries with rich renewable resources, like Laos or Indonesia, can export clean power to more energy-constrained neighbors through a web of interconnectors. The grid will also reduce reliance on fossil fuels, stabilize prices, and support regional economic growth.

The APG project is designed to work alongside national energy strategies, providing infrastructure blueprints, technical guidance, and a platform for multilateral cooperation. It has become a flagship model for regional power integration in the Global South.

Looking Ahead

The World Bank’s additional support reinforces ACE’s role as a technical hub and policy driver for ASEAN’s evolving energy landscape. With ongoing collaboration between member states, development partners, and private sector stakeholders, the ASEAN Power Grid could become a cornerstone of the region’s sustainable development pathway—delivering clean, affordable, and reliable energy for over 600 million people.