ADB $70 billion energy and digital infra push puts Southeast Asia center stage
A solar power plant in Tay Ninh Province, Vietnam. Singapore’s central bank supports bio-energy and solar energy projects in Southeast Asia through the Green Investment Partnership.
Tan Dao Hear | An | Getty Images
Asian Development Bank $70 billion planThis project, which supports new energy and digital infrastructure in the region, is expected to support Southeast Asia the most.
The program includes a pan-Asian energy grid initiative connecting national and sub-regional energy systems and an Asia-Pacific digital highway to close the infrastructure gap in the region, according to ADB, which has set 2035 as the deadline for financing the projects.
“Energy and digital access will determine the future of the region,” ADB President Masato Kanda said on Sunday.
This connectivity will create the systems Asia and the Pacific need to grow, compete and connect, Kanda said. “By connecting power grids and digital networks across borders, we can reduce costs, expand opportunity, and provide reliable power and digital access to hundreds of millions of people.”
While the funds are for the entire Asia-Pacific region, experts say Southeast Asia is expected to be the biggest beneficiary of the ADB’s connectivity push.
Greg Statton, vice president and chief technology officer for Asia Pacific and Japan at AI-powered data security firm Cohesity, said the bank generally gravitates towards developing member countries based on growth needs, project readiness and mandate, beyond pure market size.
Statton noted that unlike Southeast Asia, China has largely moved away from ADB financing with its own financial institutions and policies. India has strong access to capital markets and has many domestically financed projects, although it still receives a modest amount of funding from the ADB; Japan is one of ADB’s main funders.
“Larger economies such as China, India and Japan already have more established local capital markets, deeper infrastructure financing channels and greater financial capacity to finance large-scale projects internally,” said Chasen Nevett, managing partner of principal investments at GMA Capital Partners, adding that Southeast Asia is structurally underbuilt in terms of both energy connectivity and digital infrastructure.
“This combination creates a more efficient deployment environment for capital, where every dollar can pave the way for broader private sector participation and accelerate regional integration,” Nevett said.
power play
Indonesia, Vietnam and the Philippines are expected to be the biggest beneficiaries in Southeast Asia.
These countries are expected to receive a larger share of the $70 billion fund due to their population size, infrastructure needs and active project pipelines, based on ADB’s past lending patterns and current priorities, according to Statton.
Malaysia and Thailand could also benefit because they are regional hubs for energy and data infrastructure, but the relative marginal impact of capital could be slightly lower due to their more developed base in Southeast Asia, Nevett said.
owned by malaysia largest data center project pipeline It is expected to lead data center load demand in Southeast Asia by 2035, with Thailand accounting for nearly 60% of all proposed projects in the region, according to Wood Mackenzie.
Scott Dunn, Asia strategy and growth leader at infrastructure consultancy AECOM, said ADB funding also provides the opportunity to create interoperable transmission systems that allow clean power to flow across borders, improving reliability and reducing costs.
Markets such as Laos, Thailand, Vietnam and Cambodia have abundant hydropower and rapidly expanding solar and wind, but lack the cross-border capacity to bring clean energy to the largest demand centers, Dunn said, adding that ADB’s plans are “effectively designed for these conditions.”
ADB aims to integrate approximately 20 gigawatts of renewable energy across borders and connect 22,000 circuit kilometers of transmission lines by 2035.
