Investment in regional power connections across Southeast Asia has stalled because outdated financing methods and a lack of clear, uniform rules for trading electricity make these projects unattractive to private investors. According to the authors of the newly released report, the region’s reliance on one-off bilateral deals between state utilities has failed to keep pace with the massive technical and financial demands of building a modern, integrated grid.
“A key challenge for the bankability of cross-border projects is lack of standardised and transparent commercial power trading agreements. A reliance on bespoke bilateral agreements means the region lacks the basis for harmonised trading arrangements, thereby limiting transparency and scalability.”
Essentially, it is difficult to get large projects funded because every country has its own unique way of setting prices and managing its electricity supply, leaving the region without a common set of rules for trading power. Because these deals are often negotiated individually between states, they lack the openness and scale needed to convince international lenders that their investments will be safe and profitable.
The report “Financing the ASEAN Power Grid” was published by the International Energy Agency in Paris in March 2026. Lead author James Bragg and a team of analysts provide a comprehensive framework for unlocking the capital required to build a more integrated and sustainable energy future for Southeast Asia.
