KUALA LUMPUR: The Asian Development Bank (ADB) will commit up to US$10 billion (RM42 billion) to support projects linked to the Asean Power Grid (APG), said ADB Southeast Asia Department director general Winfried Wicklein.
The ADB and the World Bank today jointly launched the Asean Power Grid Financing Initiative (APGF) to help accelerate the region’s clean energy transition.
Wicklein said it is committing up to US$10 billion for financing of the national grids that are related to the Asean Power Grid, as well as some of the clean energy generation infrastructure that will have to be built.
“We are working on project preparation through lending, project preparation loans, grants, technical assistance and blended finance,” he told reporters at the Asean Energy Business Forum today.
He said the financing initiative brings together multiple sources of funds from commercial and multilateral financiers to philanthropies to provide project-specific support.
“The whole financing initiative brings together many multiple sources of finance from commercial through multilaterals like the World Bank and ADB, through even philanthropies. You bring them together with the project sponsors and see what each project requires in terms of very specific, tailor-made financing.”
Wicklein said the APG is “one of the most complex projects that the region has seen” due to its scale and cross-border nature.
“We have technical complexity, financial complexity, and then the institutional issues, the legal, regulatory and policy frameworks that need to be harmonised. This is why this larger partnership is required.”
Wicklein said ADB has begun work on several bilateral projects, citing the Monsoon Wind Project in Laos, which exports power to Vietnam, as an example.
Meanwhile, Bernama quoted Wicklein saying that ADB has reaffirmed that it will not finance any nuclear power generation projects under its current energy policy.
He said the bank’s existing framework does not permit funding for nuclear energy initiatives.
However, Wicklein noted growing interest among several Asean member states in exploring nuclear energy as part of their long-term energy strategies.
“At the moment, our energy policy does not allow our financing of nuclear energy.“We recognise increasing demand and exploration of nuclear options in the region, and we are following those developments with interest, but we are not directly involved at this stage,” he added.
Deputy Prime Minister cum Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof said Malaysia is pleased to put the endorsement of the Enhanced APG memorandum of understanding (MoU) as one of the Priority Economic Deliverables under Malaysia’s Asean Chairmanship 2025.
“The completion of the MoU will mark a renewed commitment of Asean to advance our energy cooperation through the APG,” he added.
Fadillah said it will be a cornerstone of the initiatives to overcome the challenges in realising the APG dream, including for the financing aspect.
“Financing the APG matters … because it is the foundation upon which our energy ambitions are built. Without adequate and innovative financing mechanisms, even the most promising projects may stall. We must mobilise both public and private 4 capital, de-risk investments, and create enabling environments that attract long-term commitments.”
He said Asean has put the APG initiative as one of the most strategic initiatives of the Asean energy cooperation.
“Asean have identified the enabling role of the APG to allow more energy cooperation between us, improve our energy security, and increase renewable energy adoption in the region.”
Fadillah said the Ministerial Interface Meeting has reaffirmed and endorsed the APG’s role in advancing the “Asean 2045: Our Shared Future” through strengthening multilateral power trade.
“The ministers noted the potential role of the APG Financing initiative to accelerate the progress of the APG. The meeting shall serve as a pivotal moment that represents the commitment of Asean to develop APG beyond just the energy sector.”
Fadillah commended the proposal to develop the APG Financing Working Group, consisting of the Asean Secretariat, the Asean Centre for Energy, the World 5 Bank, and the Asian Development Bank. “I expect the working group to work closely together in accelerating the progress of this initiative with the facilitation of ACE as the Working Group Secretariat.”
