Accelerating the ASEAN Power Grid is crucial for ensuring ASEAN’s sustainable energy future and economic growth.

In 2025, Malaysia assumes the ASEAN Chairmanship with the theme “Inclusivity and Sustainability,” prioritising ASEAN centrality, intra-ASEAN trade and investment, and sustainable, inclusive growth.

Under Malaysia’s chairmanship, the energy theme “Powering ASEAN: Bridging Boundaries, Building Prosperity” highlights the country's commitment to advancing sustainable economic growth through the ASEAN Power Grid (APG). Aligned with Malaysia’s priorities, the themes of “sustainability” and “trade” are central to its agenda, emphasising the role of cross-border electricity trade in promoting the use of sustainable energy resources.

There are three priority deliverables related to APG under this year's chairmanship, including the ASEAN Plan of Action for Energy Cooperation (APAEC) Post-2025 which will outline the new directives and agenda on energy cooperation for ASEAN for the next five years; the Enhanced APG Memorandum of Understanding (MoU); and (iii) the APG Financing Facility.

These priorities are foreseen to lay a strong foundation for turning the tide for APG development in a more rapid but coordinated fashion, which is expected to lead to more cross-border infrastructure in the pipeline and increase cross-border trade bilaterally or multilaterally.

Accelerating the APG is crucial for ensuring ASEAN’s sustainable energy future and economic growth. The APG strengthens energy security, enhances grid reliability, and supports national energy priorities.

By interconnecting grids, it enables the integration and sharing of variable renewable resources, helping member states achieve renewable energy and carbon reduction targets. Improved cross-border connectivity not only allows greater renewable penetration but also stabilises energy supply.

Additionally, rising demand for clean energy—especially from large industries—will spur renewable investments, driving regional economic growth. Malaysia’s Chairmanship offers a key opportunity to fast-track APG development and unlock these strategic benefits.

The current status of ASEAN Power Grid development
To put it in context, the ASEAN Power Grid, in our view, consists of any grid-to-grid cross-border transmission infrastructure that is pursued bilaterally by ASEAN countries. The ASEAN leader's vision is for the region to be fully interconnected by having cross-border interconnection between countries by 2045.

In recent years, ASEAN has made notable progress in developing APG infrastructure and markets. To date, 9 of the 18 priority interconnections identified under the ASEAN Interconnection Masterplan Study (AIMS) III are operational, providing around 7.7 GW of cross-border capacity.

The APG Interconnection Project Profile, highlighted under Lao PDR’s Chairmanship last year, tracks the status of these priority projects. Currently, two key interconnections — Sumatera–Peninsular Malaysia and Kalimantan–Sabah — are undergoing feasibility studies. Moving forward, ASEAN must accelerate feasibility assessments across the remaining projects to advance them to a bankable, investment-ready stage.

Cross-border power trade under the APG has evolved from bilateral deals to multilateral initiatives, exemplified by the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP).

Since its launch in 2022, LTMS-PIP has transmitted 266 GWh of hydropower from Lao PDR to Singapore via Thailand and Malaysia, with plans to double its capacity to 200 MW by 2026—underscoring strong political will for regional energy integration. The project also highlights the limitations of relying on stacked bilateral agreements, pointing to the need for more flexible, multilateral market frameworks.

Building on LTMS-PIP’s success, a similar approach is now advancing in the Brunei-Indonesia-Malaysia-Philippines (BIMP) subregion with the launch of the BIMP Power Integration Project (BIMP-PIP) during the 41st AMEM. Lessons from LTMS-PIP can guide BIMP-PIP in moving beyond bilateral deals towards a more integrated, dynamic power market.

The way ahead for ASEAN to enhance cross-border trading in the region is to explore more streamlined, multilateral market mechanisms to enable dynamic, real-time trading. Developing a regional short-term market or exchange platform could serve this purpose to better accommodate variable renewable supply, like hydropower, and fluctuating demand, ultimately unlocking greater efficiency and resilience in ASEAN’s power trade.

Leveraging Malaysia’s chairmanship to advance APG Development
Malaysia is well-positioned to play a pivotal role in advancing APG development this year, leveraging its national experience in cross-border electricity trading.

Through initiatives like the Cross-Border Electricity Sales (CBES) Renewable Energy Scheme and the Energy Exchange Malaysia (ENEGEM), Malaysia has pioneered policy frameworks that enable renewable energy producers to export clean electricity to neighbouring countries.

These efforts not only enhance energy security and renewable energy utilisation but also deliver mutual economic benefits, providing a practical model for ASEAN’s energy cooperation.

Malaysia’s experience in establishing a trading platform with neighbouring countries offers valuable lessons for the APG. What began at the subregional level demonstrates how clear policies, regulatory coordination and alignment, and setting market mechanisms can facilitate cross-border trade effectively.

This approach is scalable and could be expanded beyond immediate neighbours, laying the groundwork for a more integrated and flexible regional power market as interconnections grow.

Malaysia’s leadership this year is crucial in bridging the gaps between member states and leading the region to provide coordinated regional solutions to APG, learning from the sub-regional effort.

By bringing ASEAN countries together under its chairmanship theme of "Bridging Boundaries, Building Prosperity," the ASEAN countries can leverage the collective momentum to realising a fully interconnected ASEAN Power Grid and advancing the region’s long-term energy security and transition goals.