By Derek Chua
The ASEAN Power Grid (APG) has the potential to strengthen energy security, support decarbonisation and deliver wider economic benefits across Southeast Asia. However, translating regional ambitions into functioning interconnections will require clearer cost-sharing arrangements, regulatory certainty and coordinated project planning.
At SIEW Thinktank Roundtable A, policymakers and industry leaders examined the practical steps needed to advance cross-border electricity trade. The discussion was moderated by Dr Roger Fouquet, Principal Research Fellow, Energy Studies Institute, National University of Singapore.
Aligning regional priorities and benefits
Lin Yang, Deputy Executive Secretary for Programme, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), highlighted the APG's potential to serve as a model for wider regional energy integration. She cited the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project as an example of regional cooperation moving towards implementation.
Beyond electricity trade, Lin emphasised the importance of strengthening regulatory capabilities and developing human capital. She also highlighted ESCAP's work with NUS on a human capital readiness assessment framework, aimed at helping countries ensure that the benefits of energy connectivity extend to communities and vulnerable groups.
Jennifer Tay, Partner at Baringa, noted that ASEAN's diverse electricity market structures complicate the allocation of interconnection costs and benefits. Countries must first establish whether their priorities are energy security, decarbonisation or broader socioeconomic development before determining how costs should be shared. She cautioned against expecting large electricity users alone to bear the costs of infrastructure that delivers wider public benefits.
Planning infrastructure around shared objectives
Drawing on Australia's Marinus Link project, Stephanie McGregor, Chief Executive Officer, Marinus Link, emphasised the importance of aligning participating jurisdictions on strategic objectives, regulatory arrangements and cost allocation.
She noted that project success extends beyond physical construction to measuring and communicating long-term benefits to electricity markets and local communities. ASEAN could also draw on international experience to avoid repeating earlier challenges in interconnector development.
Giacomo Rizzi, Transmission Business Director – APAC, Prysmian, explained that supply chain capacity was not necessarily the main constraint on subsea interconnector projects. Depending on their scale and complexity, projects could take three to seven years to deliver after approval.
He stressed that early engagement among manufacturers, contractors, financiers, regulators and governments would enable more realistic project timelines. Advances in cable technology could also improve transmission capacity and affordability.
Making cross-border projects bankable
Mike Ng, Group Chief Sustainability Officer, OCBC, identified three requirements for bankability: clarity, appropriate risk allocation and durable agreements.
He explained that uncertainty over export licences, domestic supply obligations and regulatory changes could undermine project revenues and discourage lenders. With financing arrangements potentially spanning 20 to 25 years, intergovernmental agreements and government support mechanisms could help provide greater long-term certainty.
Ms Tay also highlighted credit enhancement mechanisms as a way to strengthen project creditworthiness and manage financing costs. She emphasised the importance of deploying available funding where it could most effectively address financing risks.
Building momentum through implementation
The discussion reinforced that advancing the APG depends on more than investment in physical infrastructure. Clearer responsibilities, institutional capabilities and sustained coordination will be essential to turning regional agreements into viable projects.
Mr Ng emphasised that completing initial projects could establish commercial, financial and regulatory precedents, while building trust among participating countries. These practical examples could help reduce barriers to subsequent interconnections, allowing the APG to develop progressively across the region.
Stay tuned as the conversation evolves throughout the day. Follow @SIEW_sg on Telegram and X (formerly Twitter) for key insights and the latest updates.
