Need for an agreed business model to complete the ASEAN Power Grid plan by October stated by Malaysia's DPM Fadillah Yusof
ASEAN Power Grid (APG) MoU Signing Paves Way for Regional Energy Transition
In October 2025, ASEAN member states are set to sign a new Memorandum of Understanding (MoU) on the implementation of the ASEAN Power Grid (APG) during the bloc’s Energy Ministers’ Meeting. This significant agreement will outline a detailed roadmap for the APG, covering harmonization of standards and regulations, as well as a business model for cross-border energy exchange among member states.
The APG is seen as a compelling investment platform for institutional and private investors seeking long-term, climate-aligned imperatives. The World Bank, Asian Development Bank (ADB), and American firms have shown interest in financing the APG's development, aligning with their broader vision for regional power grid integration and energy trade.
The ADB, in particular, has been active in analysis and project prioritization to double transmission capacity by 2040 and enable full integration by 2045. This ongoing collaboration and financial and technical involvement by multilateral development banks are expected to support the APG’s infrastructure and policy frameworks.
Meanwhile, Malaysia, as this year's ASEAN chair, is eager to make progress on the APG, which experts have said is critical to decarbonising the region's energy sector. Malaysia views the APG as vital to promoting collective energy resilience, expanding energy trade, reducing fossil fuel dependence, and boosting regional energy security.
Malaysia's deputy prime minister, Fadillah Yusof, has emphasized the need for systemic investments in smart grids, advanced energy storage, and cross-border infrastructure. To facilitate this, the Malaysian ministry is gathering input from all industry players regarding the rates for renewable energy trade.
Participants under the Corporate Renewable Energy Supply Scheme (CRESS) are subject to wheeling charges paid to Tenaga Nasional, with current rates set at 45 sen per kilowatt-hour (kWh) for intermittent sources of energy such as solar and 25 sen/kWh for consistent renewable energy sources which use battery storage systems. This point of contention for industry players is expected to be addressed before the end of the year.
The Securities Commission Malaysia's chairman, Mohammad Faiz Azmi, has called for Malaysia's capital market and all market players to embed sustainability considerations into their products and services. To further this goal, the Securities Commission Malaysia will integrate the National Energy Transition Roadmap (NETR) and other national priorities into the Capital Market Masterplan 4.
The forum, which brought together more than 200 representatives from government, business, finance sectors, and civil society, discussed actions for achieving a more resilient future in Southeast Asia. Fadillah Yusof emphasized that ASEAN member states must agree on a business model for the ASEAN Power Grid (APG) to ensure its successful implementation.
However, global headwinds, such as geopolitical tensions and volatile economic trade dynamics, pose a risk of diverting vital capital away from emerging economies. To counteract this, the Securities Commission Malaysia is working to boost financing towards climate adaptation in the region and has created a guide on adaptation and mitigation for the ASEAN Taxonomy.
In conclusion, the upcoming MoU signing on the ASEAN Power Grid (APG) marks a pivotal step towards implementation and could evolve into a formal agreement. The enhanced MoU renewal indicates continued engagement from financial partners like the ADB, and the APG's business model agreement will formalize cooperation on cross-border energy trade with regulatory harmonization. The progress made on the APG is crucial for the region's energy transition and will contribute to a more resilient and sustainable future for Southeast Asia.
[1] ASEAN Power Grid (APG) MoU to be signed in October 2025. (2022). Retrieved from https://www.asean.org/news/asean-power-grid-apg-mou-to-be-signed-in-october-2025/
[2] Malaysia to lead ASEAN in implementing ASEAN Power Grid (APG). (2022). Retrieved from https://www.malaysiakini.com/news/669052
[3] ADB supports ASEAN efforts to double power transmission capacity by 2040. (2021). Retrieved from https://www.adb.org/news/adb-supports-asean-efforts-double-power-transmission-capacity-2040
[4] ASEAN Interconnection Masterplan Studies. (n.d.). Retrieved from https://www.asean.org/energy/asean-energy-cooperation/asean-interconnection-masterplan-studies-aims/
[5] World Bank to support ASEAN in implementing ASEAN Power Grid (APG). (2021). Retrieved from https://www.asean.org/news/world-bank-to-support-asean-in-implementing-asean-power-grid-apg/
- The signing of the Memorandum of Understanding (MoU) for the ASEAN Power Grid (APG) in October 2025 is crucial for the region's energy transition, facilitating a roadmap for harmonization of standards and regulations, and a business model for cross-border energy exchange among member states.
- Institutional and private investors view the APG as a compelling investment platform for long-term, climate-aligned imperatives, with the World Bank, Asian Development Bank (ADB), and American firms expressing interest in financing its development.
- The ADB has been actively involved in analysis and project prioritization to double transmission capacity by 2040, aiming for full integration by 2045, and is expected to support the APG's infrastructure and policy frameworks.
- Malaysia, as the ASEAN chair, is focused on decarbonizing the region's energy sector through the APG, emphasizing its importance in promoting collective energy resilience, expanding energy trade, reducing fossil fuel dependence, and boosting regional energy security.
- Malaysia is gathering input from all industry players regarding the rates for renewable energy trade and has highlighted the need for systemic investments in smart grids, advanced energy storage, and cross-border infrastructure.
- Participants under the Corporate Renewable Energy Supply Scheme (CRESS) are subject to wheeling charges, with current rates set at 45 sen per kilowatt-hour (kWh) for intermittent sources of energy such as solar and 25 sen/kWh for consistent renewable energy sources using battery storage systems.
- To counteract potential risks from global headwinds, the Securities Commission Malaysia is working to boost financing towards climate adaptation in the region, integrating the National Energy Transition Roadmap (NETR) and other national priorities into the Capital Market Masterplan 4, and creating a guide on adaptation and mitigation for the ASEAN Taxonomy.
