Ahead of the annual meeting of Asean’s energy ministers next month, host country Malaysia has said that it would prioritise advancing the Asean Power Grid, a project that has been about 30 years in the making.

Among the main challenges that needs to be addressed is the lack of harmonised regulatory and technical standards across Asean, suggested Kitty Bu, vice president for Southeast Asia at the Global Energy Alliance for People and Planet (GEAPP). Established by the IKEA Foundation, Rockerfeller Foundation and the Bezos Earth Fund, GEAPP now has over 50 alliance partners that contribute capital, technical expertise and global reach. 

Individual countries also need to prioritise upgrading their electricity grids to transmit more renewable energy and integrate battery storage systems.

However, this harmonisation of standards and grid upgrades are made more challenging by differences in economic size and maturity across the 10 Asean member states, Bu told the Eco-Business Podcast.

“No country should be doing everything and anything under the sun entirely on their own. There has to be a coming together, a unified focus to address regional bottlenecks,” she said.

To address the need for financing of these solutions, GEAPP worked closely with financial institutions in the region to fund battery storage deployment through a blended finance model.

Tune in as we discuss:

• How geopolitics is affecting Asean’s energy transition
• Ideal outcomes from the Asean minister’s meeting
• Upholding social justice in the energy transition
• Optimistic examples of transition finance

Could you give us your view of what’s been happening when it comes to the energy transition in Southeast Asia, against the backdrop of recent political developments?

In Asean, we have a cluster of smaller countries each going through their respective energy transition journeys, all at different points in maturity with one thing in common, which is that we collectively all have transition targets. They are not the same targets, but the political will is there with clear goals to work towards various different milestones in the next five to 20 years. 

However, a lot of things are happening besides that. The region’s energy demand growth is twice the global average. Our economic growth has been robust in the past decade, and the forecast for the next decade to come is very much that growth will happen in Asia. At the same time, we are devouring energy. We need more energy to power economic growth, and it is the most important thing on government minds to ensure stable energy supply as well as jobs, economic development, and livelihoods for our respective regions. 

In a nutshell, Asean has to develop, grow, and ensure jobs are available, but we’re also trying to understand a very messy energy transition process. We need to wind down the brown assets, but at the same time, we need to ramp up the green. So it’s a messy, complex process we’re going through. Some assets need to be ramped down, but what and how and when do we ramp up while making sure economic development is robust and we maintain sustainability and stability?

To your question about geopolitical turbulence – we are exposed to news about trade tensions, tariff shifts and regional political unrest. That all adds friction. But we do not see that as a blockade to advancing the energy transition in Southeast Asia. We recognise that all of this is part of the backdrop that is happening now, which definitely adds on complexity. 

When you say it adds complexity, do you see it having affected the policies or investment decisions needed to move the energy transition forward?

I don’t see it as a defining factor. I think trade and tariffs can indeed influence the clean energy sector, particularly the affordability of renewable energy, but at GEAPP, one of the things we focus on is advocating for policies that support the free exchange of clean energy technologies. We advance the massive adoption at scale of these readily available, affordable technologies. And we will continue to work with our international partners to facilitate that.

The Asean energy ministers meeting is happening in October. What are the ideal outcomes from this meeting? Do you think they will find a way to progress what Malaysia has said is its priority, the Asean Power Grid (APG)?

 I think it goes without saying that particularly this year, the Asean Energy Ministers meeting in Kuala Lumpur comes not only at an important time, but at a critical juncture. There have been a lot of conversations about Asean coming together, about regional collaboration as a general alliance. And of course, the APG has been mentioned in that context a lot. 

To start with, the ministers should ideally prioritise accelerating the grid upgrade, flexibility and storage deployment. These are critical technologies and important barriers that we need to address to make sure that in a complex landscape like Asean, where every economy faces a different energy transition reality, no country is left behind.

Also, no country should be doing everything and anything under the sun entirely on their own. There has to be a coming together, a unified focus and prioritised acceleration to address something that is also a regional bottleneck.

In this case, it’s making sure our grid is flexible enough to absorb more renewable energy, decentralisation, as well as battery storage for deployment. These are all important. 

My second point is that a big bottleneck when we talk about the APG is why has it been 20 years in the making? Some may argue that it’s been around for 30 years. We have 30 years of feasibility studies, roadmaps and technical analysis. What is stopping progress?

I think one thing that we identify is the harmonising of cross-border standards across different Asean countries. Without harmonising, unifying and coming up with a very clear set of standards that foster cross border trade and give financiers confidence to enter into deals, we cannot enable the APG and the power trading system that we aim to set up in this part of the world. 

We have seen regional power trading in Europe that started over a hundred years ago; we have even seen partial connectivity in Africa 50 years ago. Asean is a region where we have strong demand and a robust forecast for what’s needed to power economic growth, but why have we not been able to set up a robust cross-border trade to make sure that what makes sense for the energy transition and what makes business sense is actually going to happen on the ground?

One thing that I do want to bring forward is to fully acknowledge the complexity that our region faces. When power is traded in Europe, if a connectivity was built between France and Germany, these are two fairly large economies that have similar demand and purchasing power.

However, in this part of the world, economic disparity is something that’s unique to us. That is to say that for APG to work, it is going to be a complex process where there are multiple layers that’s unique to Asean.

The third point is that the scaling of blended finance instruments and innovative sustainable financing and green financing mechanisms to close the investment gap will be absolutely key for this region. And that takes solid and strategic alliancing that brings different types of capital allocators, different types of players with different sources of capital doing different things in a deal to come together and bring forward projects and deals that make sense to all people coming to the table.

Malaysia recently announced that it was opening bidding for Enegem, its renewable energy exchange with Singapore, a year after Enegem was launched.  Do you think that this is an appropriate timeline? How long should it take for policymakers to agree on the standards you suggested, and then actually operationalise the projects?

I cannot comment directly on government initiatives (like Enegem). GEAPP in itself is built on the premise of a multi-coalition, and our strength is empowering opportunities for collaboration and bringing our alliance partners together.

We see this as more than a commercial opportunity – it’s more a step towards a more integrated, innovative, and sustainable energy future for the region. It tells us that Asean countries are willing to experiment with new models of collaboration and are open to learning from each other, so the fundamentals of the collaboration is there.

On the subject of the standards, right now Asean as a region, with all of its member states, has no single unified cross-border power trading standard. Instead, it operates through the various different initiatives and standards it either has within countries or is trying to form through a mechanism like the APG.

The APG’s aim is to gradually integrate the different members’ electricity grids, to facilitate trade and also share renewable energy. That is not just about building supply and addressing demand but building a marketplace, where people cannot just trade electricity, especially green electricity, but also ensure prosperity, profit and benefits are shared with all the communities and people along the grid lines. That’s the justice piece that we care a lot about. 

But notice what I said, which is that the APG aims to “gradually” interconnect the different national standards and the grids, and create a marketplace where free trade could happen while ensuring a lot of other criteria and conditions are met.

I believe the progress is being made through the pilot projects like the Laos-Thailand-Malaysia- Singapore Power Integration Project, which serves as a model for bilateral and multilateral agreements that need to harmonise the technical standards, but also the policies, regulations and institutional frameworks.

Now, as much as we would love to put a deadline on something like this – we would love to manage this in the same way that we manage other deals with a financial close or – this initiative is something which I think is fairly groundbreaking. Something we have never done before. 

So it will have to be a gradual, step-by-step approach in which APG develops processes, analytical studies, and pilot projects to learn while building the grid out. There are also fundamental needs when it comes to renewable energy, like building up the capacity of all the countries that are going to participate in this market. 

This is most importantly a multilateral cooperation. So when you have a pilot, it may be a country-to-country transmission line. It is not going to be the entire vision of the APG, but it offers a learning experience and know-how for building part of that vision. 

But this is something that is going to involve a lot of countries and governments – it is a fairly lengthy process, especially when you touch upon multilateral cooperation.

GEAPP is monitoring a lot of the pilots that are ongoing at the moment. Judging whether a pilot project is successful is a process of “seeing is believing”, and seeing that it is bringing people along on that (energy transition) journey.

We are seeing some pilot project success so far, considering all the challenges. For example, Asean has extremely diverse regulatory systems that lack harmonisation. We also need to consider the amount of standardisation needed for regulatory frameworks – it is quite a significant challenge.

I think there is insufficient infrastructure and financing, in terms of how the public, private and development sectors can come together and agree on what an infrastructure deal looks like in terms of their balance sheets, or books. It is a process of trying to bring different actors across the financing space together. 

A similar exercise needs to happen in terms of harmonising the technical differences, bringing the technical experts and the technical standards together. It’s about harmonising the different grid codes as well as the technical requirements across all Asean countries. That in itself is a complex undertaking.

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As much as we would love to put a deadline on the Asean Power Grid – the same way we manage other projects or deals with a financial close – it will have to be a gradual, step-by-step approach.

Kitty Bu, vice president for Southeast Asia at the Global Energy Alliance for People and Planet (GEAPP)

You mentioned the need to  ensure that the transition is just, and that it takes into account all the different communities living alongside the grid. What needs to be done by policymakers or financiers to prioritise social justice in their projects?

GEAPP cares about the just piece of the energy transition – our targets are the four gigatonnes of future carbon emissions are reduced, one billion people with clean energy access, as well as 150 million new jobs and sustainable livelihoods created.

So in this case, the targets cover various initiatives including the APG. There have been a lot of conversations on harmonising technical standards, raising infrastructure funding and sustainable finance.

But I think we need to collectively think about how to ensure that discussions about justice happen at the start of the conversation and not as an afterthought. There will be a lot of communities physically residing on the land along the transmission lines, and there will be a wider community that needs to benefit more broadly from a clean, sustainable and affordable future that’s powered by renewable energy.

So when we talk about the just piece of the puzzle, it is not contained within a small group of people. The big picture is that the APG needs to fundamentally benefit the economy through livelihoods, the jobs, and the people. And in terms of the grid lines – where they run, where they physically connect countries, and how they are built out – we need to think about how that impacts local communities.

I use the word “impact” as a neutral word. It could be positive, it could be negative, and in this case I meant it in a positive way. What are the things that we can do in advance because we are taking this group of people into consideration early on? We are trying to come up with feasibility studies, understanding the landscape, tailoring solutions and using dedicated financing for these groups of people, to ensure that they are not left behind, but are rather fully participating in the energy transition and benefiting from this process.

On your point about financing, are there any examples of successful projects that are en route to becoming good models when it comes to the energy transition?

Blended finance is one of the tools that we can bring in as a financial modality to ensure that we bring different actors together who have different mandates, missions and ways of working. The beauty of blended finance is that we’re not trying to deter people from doing what they’re built to do. Instead, we try to leverage their strengths.

Blended finance also has another critical function, which is for something that is very new to all of us, it has the power of slightly bending the economic curve to make this project feasible. 

By slightly bending the economic curve, I do not mean that we are over-subsidising a deal so that people do not see prospects for such deals to be replicated. In fact, that is the opposite of what we’re trying to do. It has to enable something that should happen but for various different reasons, this nascent stage of pilots and trial and error is not taking off. 

But I think blended finance is a term that describes a radical collaboration of alliance partners, and that’s what, at the heart of GEAPP, we’re trying to do. We’re trying to bring different actors together, we’re trying to make sure that there is a unified conversation to explore the different ways that we can come together and do something that needs to scale at a rapid speed, compared to previous milestones. 

In the context of GEAPP, we had a few milestones in 2023 and 2024 born out of Singapore. For instance, we (backed) Clime Capital, a Singapore-based fund manager focused on accelerating the low carbon transition, in its first close of the South East Asia Clean Energy Fund II. That was the first blended investment fund established in Southeast Asia to focus on the energy transition.

We also have a partnership with the Monetary Authority of Singapore (MAS) and Asian Development Bank (ADB) and to establish the Energy Transition Acceleration Finance Partnership in Asia. That is a blended vehicle that aims to raise up to US$2 billion in concessional and commercial capital from like-minded partners in order to address the regional energy transition. 

We have also partnered ADB, starting mid-2023, to announce a new capital fund to accelerate clean energy access and transitions in countries across Asia and South Asia. So these are the trial-and-error experiences that GEAPP has had in 2023 and 2024. 

Fast forward to 2025, we’ve also started experimenting with a technical assistance (TA) facility that is pan-Asian with partners like ADB to address battery storage technologies. Now that the prices have come down drastically, battery storage needs to scale across the region, but the adoption speed can be increased.

At our core is the alliancing. I think some of this is, in principle, what needs to happen for APG as well, at a different scale for a different area of work. But these are the experiences that we can share. 

You’ve only recently launched the blended finance and technical assistance facilities, but are there already specific companies communities that have received this technical assistance or funds?

The initiative has a fairly long name – Enhancing Access to Battery Energy Storage System (BESS) for Low-carbon Economies (ENABLE) – and was launched in June. It is a platform dedicated to accelerating battery storage deployment across Asia and the Pacific region. 

The way to think about this is that at GEAPP, we have tried various different trials and ways of mobilising sustainable finance and energy transition financing towards the right projects, initiatives and technology. The platform approach is meant to bring the different human and financial resources together to fast track all the battery storage projects in the region, together with other like-minded development partners.

Given the nascent stage, we are focused on building this out and bringing more partners onto the platform. The grant is administered by ADB and consists of US$500 million from their Smart Energy Innovation Fund under the Clean Energy Financing Partnership Facility. It also receives financing from GEAPP of about US$250 million.

Going forward, what are your priorities over the next six to 12 months when it comes to Asean’s energy transition?

It is time, especially around what’s coming up in Kuala Lumpur, for all of us to pause for a second to take stock and reflect on the journey we have been on over the past few years. And to think about where we are collectively as Asean in our energy transition journey, but also individually as different member states.

I think pausing, reflecting is very important, as well as recognising the complexity of geopolitical tensions and the complex layer of the trade tariffs that is ongoing. We need to take into consideration the confidence of energy exporters, importers, as well as financiers to deal with the energy transition in a new era. 

I think the political will is there in terms of moving the needle on the energy transition. I think the focus areas are there, covering everything from battery storage and renewable energy grid upgrades to various initiatives to ensure that emissions levels continue to go down.

Those are clear in terms of what we need to get done in the Asean region. What has to happen is people taking stock of the current dynamic against the wider backdrop, understanding ways of moving forward, then taking action. 

I know we’ve been speaking about action for quite a long time, but it is at a critical juncture for our region as a whole. If we want to ensure longer term economic prosperity, it cannot just be making sure we have energy to cover our needs. We need to hedge against a future that is coming at us, hedge against possible risks to our people, our businesses, our financial institutions, our government, and also this fragile region where a lot of the problems we are immersed in already.

This transcript has been edited for brevity and clarity.