Malaysia Energy ASEAN Power Grid

According to the Association of Southeast Asian Nations (ASEAN) Centre for Energy, the region’s existing 7.7 GW capacity for cross-border electricity networks will need to be more than doubled by 2040 to meet the energy demand of its nearly 700 million people. Building the ASEAN Power Grid (APG), with sufficient capacity expansion and system integration, will be an estimated $764 billion endeavor. For U.S. companies, this presents substantial opportunities to contribute expertise and solutions across key sectors.

As ASEAN chair in 2025, Malaysia played a key role in fostering an agreement to connect the electricity grids of all ten ASEAN member states, with the goal of enhancing regional energy security, increasing efficiency, and promoting the use of other energy sources. The APG is being developed in stages, starting with bilateral connections like Malaysia-Thailand and Malaysia-Singapore, then expanding to sub-regional groupings, and ultimately forming a fully connected regional grid by 2045.

As of 2025, thirteen interconnections already exist, and pilot programs like the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project (LTMS-PIP) demonstrate the feasibility of cross-border energy trade. Malaysia’s strategic location allows it to serve as a transit and trading hub in this network, with significant opportunities for U.S. businesses in this promising market.

At the 43rd ASEAN Ministers on Energy Meeting in Kuala Lumpur, member states agreed that advancing the APG requires not only new cross-border links but also major upgrades to domestic transmission and distribution systems, along with coordinated development of subsea power cables. At this meeting, the Asian Development Bank and the World Bank committed up to $10 billion and $2.5 billion, respectively, towards the APG Financing Initiative. In addition, financing for the endeavor will rely heavily on private-sector participation, providing U.S. companies with avenues to invest, partner, or provide specialized services.

There is strong demand for international expertise, especially in areas such as regulatory harmonization, interoperable technical standards, and trusted mechanisms for data sharing. U.S. firms offering smart grid technologies, advanced metering infrastructure, battery storage technology, cybersecurity solutions, advisory services, and engineering expertise in grid connectivity and modernization could play a crucial role in the development of this multilateral initiative, which aims to shape the future of energy across ASEAN.

Interested U.S. companies are encouraged to contact Commercial Specialist Mohan Gurusamy at office.kualalumpur@trade.gov.