Southeast Asia Power Grid Initiative Receives MCDF Concept Development Support Under AIIB-ASEAN Program

Parallel support for the concept development of power transmission interconnection projects in mainland and maritime Southeast Asia, respectively, was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee (GC) during its meeting in Beijing on 25 November.

MCDF’s concept development support will advance the Association of Southeast Asian Nations (ASEAN) Power Grid Initiative, which seeks to integrate the region’s electricity networks to accelerate renewable energy development and trade. The concept development will guide the identification of high-quality projects for prospective financing by the Asian Infrastructure Investment Bank (AIIB) and partners.

The MCDF-funded concept development will be implemented under AIIB’s Joint 3-Year Program with ASEAN Supporting Infrastructure Connectivity in the ASEAN Region. The GC approved a USD2.69 million grant for the program in October 2022, including a provision for six early project preparation (concept development) support totaling USD900,000 (up to USD150,000 each).

The MCDF concept development support in mainland and maritime Southeast Asia each cost USD157,500, totaling USD315,000, and are the fifth and sixth, and therefore final, pre-approved grants under the provision for the AIIB-ASEAN program.

MCDF’s support covering mainland Southeast Asia will fund project concept or pre-feasibility studies for interconnectors highlighted in the ASEAN Interconnection Masterplan Study (AIMS) III and backbone domestic transmission systems, focused on Cambodia, Lao PDR, peninsular Malaysia, Singapore, Thailand, and Viet Nam, as well as possible cross-border transmission lines for the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project.

In maritime Southeast Asia, MCDF support will fund project concept or pre-feasibility studies for cross-border transmission lines and domestic grid upgrades in the Brunei Darussalam-Indonesia-Malaysia-Philippines Power Integration Project, including an overhead system on the island of Borneo and submarine cable development.

MCDF’s respective support in mainland and maritime Southeast Asia will also fund data collection and analysis pertaining to interconnectors identified in AIMS III and domestic transmission system upgrades required for the interconnectors; regulatory framework assessment; and interconnector prioritization based on project and regulatory readiness.

Priority interconnectors identified with MCDF’s support will reflect technical, economic, environmental, and regulatory criteria for AIIB and partner financing. The support will also foster engagement with national utilities and relevant government agencies on potential next steps.