The ASEAN Power Grid (APG) is a regional initiative to link electricity systems across all 10 ASEAN member states to enhance energy security, support renewable energy use and strengthen economic integration. With electricity demand in Southeast Asia expected to triple by 2050, the APG enables more efficient power sharing, allowing surplus clean energy from countries like Lao PDR and Malaysia to flow to high-demand economies such as Vietnam, Thailand and Indonesia.

Progress, however, has been slow. Cross-border trade is still limited, mostly bilateral, and hindered by political, technical and, especially, financial challenges. While projects like the Lao-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) show the potential for multilateral trade, many barriers remain.

To address persistent financial constraints and catalyse investment, ASEAN, together with the Asian Development Bank and the World Bank, launched the APG Financing Facility (APGF) in 2025. This dedicated platform supports cross-border transmission projects end to end, from early feasibility to construction. The APGF aims to unlock regional grid integration through more coordinated, predictable and accessible financing.

This policy brief reviews the current state of APG development, outlines key challenges, and proposes strategic actions to accelerate progress towards a unified and sustainable regional power grid.

Framing the vision of the APG

The APG is a flagship regional initiative to interconnect the national electricity networks of all 10 ASEAN countries. Conceived under ASEAN Vision 2020 (formally articulated in 1997), the APG seeks to enable cross-border power trading and “fully integrated grid operations by 2045”. By linking disparate systems, the APG aims to improve energy security and reliability across a rapidly growing region. It will allow countries with surplus generation (e.g., hydropower in Laos or Malaysia) to export to deficit neighbours, while creating a larger, more stable market for renewable energy. The APG is expected to ensure reliable electricity for over 670 million people, while accelerating decarbonisation by maximising regional renewables. In ASEAN’s long-term vision, stronger grid links will foster deeper economic integration and energy trade among member states.

Supporting this vision, ASEAN institutions and development partners have mapped out priority interconnection projects and co-operation frameworks. For example, the Heads of ASEAN Power Utilities/Authorities (HAPUA) and the ASEAN Plan of Action for Energy Co-operation have identified dozens of projects (the ASEAN Interconnection Masterplan Studies [AIMS] to build new high voltage lines linking countries in sub regions (Greater Mekong, Indonesia-Malaysia/Philippines Growth Triangle, etc.). By combining existing bilateral links into a coherent network, these efforts aim to eventually achieve the APG goal by 2045. As one analysis notes, some 18 interconnectors (including subsea links and the longest high-capacity cables planned globally) are envisioned to more than double ASEAN’s transmission capacity by 2040.

The need for the APG is driven by Southeast Asia’s soaring electricity demand. Energy use in ASEAN is projected to triple by 2050 due to population and economic growth. Without regional cooperation, this could mean chronic shortages, volatile prices and greater fossil fuel dependence. Power deficits already affect some countries while others have excess clean energy; a connected grid would allow surplus electricity (often from renewables) to flow where needed, reducing waste and stabilising supply. In particular, landlocked and hydropower-rich Lao PDR, Myanmar and parts of Malaysia hold vast low-carbon potential, while fast growing economies like Vietnam, Thailand and Indonesia need more supply. By linking them, the APG can “tap low-carbon and renewable energy sources in the region and contribute to economic development and improving energy security”. In short, the APG is viewed as essential for affordable, reliable and green power in ASEAN.

Structural barriers and strategic challenges 

Despite this promise, delivering the APG is a long-term and complex challenge.  There are multidimensional problems to solve:

  • Political/Institutional barriers:  Member states have differing levels of commitment to cross-border links, often prioritising national projects over regional ones.  No single ASEAN entity has ultimate authority to coordinate APG planning, so decisions must emerge from consensus. This fragmentation means coordination on policies, standards and priorities is slow and uneven.
  • Technical and regulatory hurdles: ASEAN countries have diverse grid systems, codes and grid frequencies. Harmonising technical standards (voltage, frequency, control systems) and regulatory rules (permissions, tariffs, market rules) is difficult. Many planned links – especially subsea cables between islands – would be new to the region and require special expertise and multilateral regulation.
  • Financing and commercial issues:  Large capital is needed to build long-distance lines and upgrade grids. Finding “bankable” commercial agreements for power trading (price formulas, contracts, wheeling tariffs) has proven challenging.  For example, even the first multicountry project saw delays negotiating transmission charges.
  • Market and legal arrange­ments: Effective cross-border trade demands complex legal frameworks and market mechanisms (e.g., regional electricity exchange, dispute resolution). Establishing these from scratch across four or more countries is arduous.

These issues mean that, to date, much of the regional power exchange remains bilateral. ASEAN’s “regional grid” has largely been a vision on paper, only incrementally realised by a series of national and subregional agreements. As one expert summary notes, “the first multilateral arrangement was endorsed in 2014, but only piloted in 2022”. In practice, each interconnection has required detailed negotiations and task forces (covering technical, legal and tariff matters) among the participating utilities. These foundational barriers constitute the problem facing the APG: while the benefits are clear, unlocking them requires overcoming long-standing institutional and market obstacles across the region.

Case study: Lao PDR-Thailand-Malaysia-Singapore (LTMS) integration

A concrete example of the APG in action is the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP). Launched in June 2022, the LTMS-PIP is the first multilateral electricity trading project in ASEAN, linking four countries in a single supply chain. Under this arrangement, renewable hydropower from Lao PDR (primarily from existing dams) is sold to Singapore via transmission through Thailand and Malaysia. In practice, Laos transmits power by 230 kV AC line to Thailand (Nam Ngum-5 substation), Thailand uses its existing HVDC back-to-back link to send power onward to Malaysia, and Malaysia then relays the power to Singapore over its grid. Up to 100 MW of Lao hydropower can flow to Singapore under the current agreement.

This milestone project involved extensive co-ordination. National utilities (Lao’s EdL, Thailand’s EGAT, Malaysia’s TNB, and Singapore’s PowerGrid/Keppel Electric) signed power purchase agreements and formed a joint working group with task forces on technical, commercial, legal and tariff issues. Singapore’s Energy Market Authority (EMA) licensed Keppel Electric as the importer, making the June 2022 transaction the city-state’s first-ever renewable energy import (Energy market Authority 2022). The LTMS-PIP is explicitly described as a “pathfinder” for the broader APG vision: it demonstrates that multilateral trading and renewable sharing beyond immediate neighbours is technically and commercially feasible.

Key outcomes of the LTMS-PIP so far include proving cross-border engineering viability and ironing out legal frameworks. For instance, the project showed that an existing subregional HVDC link (Thailand-Malaysia) could be repurposed for multilateral trade, and that regulatory coordination across four jurisdictions is possible through joint agreements. The project’s success has galvanised follow-up plans: for example, a similar Brunei-Indonesia-Malaysia-Philippines (BIMP-PIP) initiative was announced in 2023 to replicate LTMS-PIP’s approach. Singapore’s EMA even projects expanding such imports to as much as 4,000 MW by 2035 through APG links.

Despite the breakthroughs, the LTMS-PIP also faced challenges emblematic of APG’s problem set. Negotiations over tariff formulas caused one delay in 2024, highlighting the complexity of aligning market rules. Still, as the EMA noted, “the LTMS-PIP demonstrates the feasibility of multilateral power collaboration” and lays the groundwork for larger projects. In sum, the LTMS-PIP case shows how careful policy design and international cooperation can realise the APG, step by step.

ASEAN countries and grid integration

ASEAN member states differ greatly in their APG engagement, as summarised below.  Some (Laos, Thailand, Malaysia, Singapore) are already interlinked through projects like  the LTMS-PIP, while others have only bilateral ties or none. For example, Lao PDR functions as a regional exporter via links to Thailand, Vietnam, Cambodia and Thailand.

Thailand, in turn, is a major importer with connections to Laos and Malaysia.  Singapore’s only interconnection is through Peninsular Malaysia, which it uses to receive Lao hydropower via LTMS-PIP. In contrast, Brunei and the Philippines remain largely isolated with no operational cross-border interconnectors; both are exploring the BIMP-PIP for future links.

Cambodia and Vietnam are linked through bilateral grid arrangements. Cambodia imports hundreds of megawatts from Vietnam and Thailand, with imports from Laos expected soon, and multilateral APG transactions have not yet been implemented. Indonesia spans many islands; it participates in BIMP-PIP planning but has no direct link to the Singaporean grid. Myanmar has limited ties (e.g., import lines from Laos/Thailand) but has not joined any larger APG projects.

These differences translate into varied readiness levels. Countries like Laos, Thailand, Malaysia and Singapore show high readiness, having established links and joint frameworks like the LTMS-PIP. Vietnam and Cambodia are moderately ready, with active cross-border trade and expansion plans. By contrast, Myanmar and Indonesia are less integrated, and Brunei/Philippines remain in the low readiness category as they lack active connections. In all cases, ASEAN’s strategic plans envisage further links (such as undersea cables to Indonesian islands or Vietnam) to raise each country’s participation in the APG.

Each country’s level of APG participation reflects geography and policy. In sum, Southeast Asia has made incremental progress: a few multicountry links are now operational, many bilateral arrangements exist, and multiple projects are planned. However, truly multilateral grid integration remains at an early stage. ASEAN’s goal of a unified grid by 2045 will require sustained political commitment, heavy investment and continued expansion of cross-border projects. The LTMS-PIP shows the way forward, but the coming decades will need further “building block” projects and regulatory harmonisation to bring all ASEAN grids into one cooperative network.

Extract from a recent policy brief, “Unlocking Regional Power Trade: Policy Pathways for the APG”, by ASEAN-BAC.