The Asian Development Bank (ADB) is betting that a web of cross‑border power lines, not isolated national grids, will secure Asia’s energy future.
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Drawing a line under decades of piecemeal deals, ADB president Masato Kanda has unveiled the Pan‑Asia Power Grid Initiative (PAGI), which aims to mobilise US$50 billion by 2035 to connect grids and scale clean energy trade across the region.
PAGI is designed to stitch together existing blocs — from the Asean Power Grid (APG), to South Asia’s connectivity projects and the Caspian green energy corridor — into the foundations of a continental electricity market over time.
“[PAGI] is our answer to a fragmented world. It shifts Asia and the Pacific away from small-scale, bilateral projects and moves us toward coordinated, region-wide multilateral power trade,” Kanda said in his opening remarks at the Asia Clean Energy Forum on 9 June. “An interconnected regional system acts as a collective shield. It allows surplus clean energy generated in one country to seamlessly balance the deficit in another.”
National systems “simply cannot keep up on their own” amid surging demand from rapid electrification, AI data centres and heatwave‑driven peaks, he added.
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Based on [ADB’s] knowledge, experience and network that we have built with the various key players in the region, we realise there is more benefit to go beyond the sub-region and go up to inter-regional connectivity.
Keiju Mitsuhashi, energy director, Asian Development Bank
The initiative targets 22,000 circuit‑kilometres of cross‑border transmission and the seamless integration of 20 gigawatts (GW) of variable renewables, which ADB says could cut regional power‑sector emissions by 15 per cent and create 840,000 jobs.
About half of the US$50 billion will come from ADB’s balance sheet, with the rest leveraged from private and partner capital.
Meanwhile, ADB energy director Keiju Mitsuhashi stressed that PAGI is meant to be “APG plus plus”, not just another layer of interconnectors on top of the APG.
The bloc has been pursuing power grid integration for nearly three decades but technical and financial barriers have kept progress uneven. ADB previously pledged US$25 million in initial funding to advance the long-delayed integration plan.
“Based on [ADB’s] knowledge, experience and network that we have built with the various key players in the region, we realise there is more benefit to go beyond the sub-region and go up to inter-regional connectivity,” Mitsuhashi said in a briefing on the sidelines of ACEF on 10 June. “This is in the context of energy security in the region, especially this year when we have been impacted by the Middle East conflict, as well as strengthen the resilience of the economy in the region.”
The first “plus” under PAGI refers strengthening domestic grids and increasing storage so they can absorb more variable renewable energy, while the second is scaling grid connections themselves, since countries cannot trade power they do not generate, he added.
Mitsuhashi argued that once planners know they can tap neighbours through robust sub‑regional links, their entire system design changes, enabling a more optimised, secure and resilient energy system.
The challenge now, he said, is to stop seeing domestic projects in isolation and start treating them as building blocks of a wider, interconnected pan‑Asian grid.
Members of civil society hold a protest action in front of the headquarters of the Asian Development Bank on 10 June, during the Asia Clean Energy Forum. Image: APMDD
A regional vision that sits with fossil fuels
Civil society groups warn that ADB’s grand regional vision sits uneasily with its continued backing for fossil fuels.
Communities across Asia still shoulder rising energy costs, public debt and climate impacts while large‑scale energy projects remain “heavily driven by corporate interests rather than public need”, said the NGO Forum on ADB, a regional network that campaigns for accountability at ADB, said in a joint statement.
“The ADB continues to undermine a just energy transition in Asia by keeping pathways open for continued oil and gas expansion, preserving coal loopholes, and promoting false energy solutions,” said Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), which is an allied group of NGO Forum ADB.
The transition must be driven by publicly funded, community-led renewables rather than “costly and polluting energy systems that delay the shift to clean, renewable energy”, she added.
NGO Forum on ADB argued that a genuine just transition requires ending fossil fuel use and that any grid and transmission investments should undergo robust due diligence and stronger safeguards, especially for transboundary projects, to ensure they are not directly or indirectly tied to fossil fuel expansion.
“Without changing the underlying fuel mix, even if we change the grids, we’re still perpetuating the same problem – only at a larger, cross‑border scale,” said Naz Del Pilar, just transition officer at NGO Forum ADB.
Campaigners also pointed to ADB’s latest draft energy policy, released in November 2025, which omitted any sunset clause for gas as a transition fuel, as evidence that civil society concerns over fossil phase‑out and consultation have yet to be fully reflected in the bank’s plans.
