The traditional way of building power lines across borders, where each country pays for and manages only the section within its own territory, is hindering the development of expensive underwater cables, according to the authors of the newly released report. This “split project model” makes it difficult to fairly share the high costs and risks of subsea projects that often pass through international waters and benefit multiple nations.
The report states: “Costs may be allocated arbitrarily by geography rather than by the distribution of benefits or risks, and some jurisdictions may lack the financial capacity to bear a substantial share of the investment.” It further notes that the model “is not well suited for high cost, long-distance subsea projects spanning multiple jurisdictions.”
Essentially, when a power line is underwater, simply splitting the bill at a border line doesn’t always make sense because the most expensive parts might sit in one country’s waters even if both countries benefit equally. This approach can also make it too expensive for smaller nations that do not have the funds to pay for their specific geographic portion. By forcing each side to act independently, it is much harder to coordinate the massive technical and financial effort needed to lay cables on the seafloor.
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.
