Power Grid Investment Crucial for Asia-Pacific's Energy Future, Says ADB-WEF Report

The report highlights that without urgent expansion and modernization of national and regional grid systems, these countries will struggle to enhance energy security, create millions of green jobs, and expand access to clean electricity.

 

Inadequate investment in power grids is emerging as a significant obstacle preventing developing countries in Asia and the Pacific from unlocking the full benefits of the global energy transition, according to a new report from the Asian Development Bank (ADB). The report highlights that without urgent expansion and modernization of national and regional grid systems, these countries will struggle to enhance energy security, create millions of green jobs, and expand access to clean electricity.

Lagging Grid Infrastructure: A Bottleneck for Progress

The ADB’s latest analysis, Energy Transition Readiness Assessment for Developing Asia and the Pacific, conducted in collaboration with the World Economic Forum (WEF), underlines that while the region is poised at the forefront of global energy transformation, its power infrastructure is lagging behind. This mismatch threatens to undermine the impressive strides made in clean energy investment and development.

The report introduces a new readiness framework based on WEF’s globally recognized Energy Transition Index, offering a structured approach to assess the ability of countries to transform their energy systems. It emphasizes that modern, digitalized, and interconnected grids are essential to managing rising energy demand and integrating variable renewable energy sources such as solar and wind.

Massive Growth in Clean Energy Investments

According to the report, clean energy investment in developing Asia skyrocketed by over 900% since 2013, reaching a remarkable $729.4 billion in 2023. This accounted for about 45% of global investment in clean energy, showcasing the region's commitment to a sustainable future.

The People’s Republic of China (PRC) continues to dominate investment figures, but other countries have also made significant progress. India, along with seven additional developing countries, surpassed a landmark in 2022: renewables accounted for more than 75% of new national energy capacity additions. These countries include Bangladesh, Indonesia, Malaysia, Thailand, Vietnam, the Philippines, and Pakistan.

Policy Advances and Energy Access Milestones

While the PRC leads in most dimensions of the energy transition, other nations are closing the gap. Georgia, Malaysia, and Thailand have notably strengthened their regulatory frameworks to better support the shift towards clean energy. Meanwhile, Bangladesh, India, and Indonesia have achieved extraordinary progress in expanding electricity access to more than 1 billion people since 2010—a critical step toward inclusive development.

"Expansion of digitalized grid infrastructure is essential to integrate low-carbon electricity seamlessly into national power generation and transmission systems," said Priyantha Wijayatunga, ADB’s Energy Sector Senior Director. He added that with Asia and the Pacific projected to account for two-thirds of global energy demand growth by 2040, bridging the anticipated power supply gap would require a multidimensional approach, encompassing strong governance, innovative technologies, and sustained financing.

Regional Interconnections: A Catalyst for Efficiency

The report stresses the importance of both in-country grid connectivity and cross-border electricity networks. Regional power interconnections in Central West Asia, Southeast Asia, and South Asia are positioned as key enablers of economic efficiency and energy affordability. Well-integrated grids not only lower the cost of electricity but also enhance resilience to supply disruptions and allow for the balancing of intermittent renewable resources over wider areas.

“Reliable, affordable, and sustainable energy systems are key to supporting national and regional economic progress,” stated Roberto Bocca, Head of the Centre for Energy and Materials at the World Economic Forum. “This extensive analysis highlights both the opportunities and challenges developing Asian economies face in meeting their energy transition needs.”

The Road Ahead: Asian Clean Energy Forum 2025

To continue this momentum, the ADB will host the Asian Clean Energy Forum in June 2025. The event will explore vital topics such as cross-border energy trading, financing models for renewable energy projects, and technological innovations necessary to meet the growing demands of urbanization and industrialization. Discussions will focus on practical solutions to power homes, factories, and transport systems with clean, affordable energy.

About the Asian Development Bank (ADB)

The Asian Development Bank is a premier multilateral development institution working to foster sustainable, inclusive, and resilient economic growth across Asia and the Pacific. Founded in 1966 and headquartered in Manila, Philippines, ADB has 69 member countries, 49 of which are from the Asia-Pacific region. ADB partners with governments, the private sector, and civil society to address complex challenges, leveraging innovative financial instruments and strategic partnerships to deliver transformative results.

Through its focus on building quality infrastructure, promoting social development, and protecting the environment, ADB continues to play a crucial role in shaping the region’s sustainable future.