Power Grid Investment Lag Hampers Asia-Pacific Energy Transition, ADB-WEF Report Warns

The People’s Republic of China (PRC) continues to dominate the region’s renewable energy landscape, accounting for the lion’s share of this investment.

The Asian Development Bank (ADB), in collaboration with the World Economic Forum (WEF), has issued a stark warning that inadequate investment in power grid infrastructure is severely limiting the ability of developing nations in Asia and the Pacific to fully harness the benefits of a renewable energy transition. The newly released report, Energy Transition Readiness Assessment for Developing Asia and the Pacific, calls for a substantial ramp-up in grid modernization and cross-border connectivity to address rising energy demand and the need for integrating intermittent renewable sources.

A Decade of Growth, but Infrastructure Bottlenecks Persist

Despite making remarkable progress in clean energy investment over the last decade, the region now faces a bottleneck: its aging and fragmented power grids. According to the report, clean energy investment in developing Asia skyrocketed by over 900% since 2013, totaling $729.4 billion in 2023. This accounts for a staggering 45% of all global clean energy investment.

The People’s Republic of China (PRC) continues to dominate the region’s renewable energy landscape, accounting for the lion’s share of this investment. However, other regional players are making notable strides. India, Bangladesh, and seven other developing economies saw renewables comprise more than 75% of newly added energy capacity in 2022.

While this momentum is encouraging, the report underscores that it cannot be sustained—or translated into widespread economic and social benefits—without significant upgrades to national grid systems. These systems must evolve to support two-way energy flows, integrate variable solar and wind power, and enable long-distance transmission, particularly in remote and underserved regions.

Key Policy and Regulatory Improvements

The ADB-WEF study employs a new readiness framework built around the World Economic Forum’s Energy Transition Index to assess how prepared countries are to transition to cleaner energy systems. While the PRC leads on most indicators, countries such as Georgia, Malaysia, and Thailand have made commendable advances in strengthening policy and regulatory frameworks to encourage investment in low-carbon technologies.

Meanwhile, countries like Bangladesh, India, and Indonesia have made strides in improving electricity access, connecting over one billion people to power grids since 2010. This rapid expansion in access illustrates the enormous potential for broader socioeconomic transformation—if countries can overcome infrastructure limitations.

Importance of Grid Modernization and Regional Integration

ADB Energy Sector Senior Director Priyantha Wijayatunga stressed that “digitalized, smart, and flexible grid infrastructure is essential for integrating low-carbon electricity into national energy systems.” With Asia and the Pacific projected to account for two-thirds of global energy demand growth by 2040, the stakes are high. Modern grid systems must not only accommodate growing loads but also enable responsive, resilient, and decarbonized electricity networks.

The report argues that while each country must carve its own energy transition path based on domestic resources and policy environments, regional collaboration holds the key to efficiency and affordability. Grid interconnections across Central West Asia, South Asia, and Southeast Asia can enable resource sharing, stabilize markets, and reduce dependence on expensive fossil fuels.

Cross-Border Cooperation and Financing Imperatives

The upcoming Asia Clean Energy Forum in June—hosted by ADB—will spotlight cross-border energy trading, digital grid solutions, and innovative financial mechanisms to catalyze infrastructure development. Key themes will include policy harmonization, capacity building, and the role of public-private partnerships in enabling long-term financing.

Roberto Bocca, Head of the Centre for Energy and Materials at the WEF, emphasized the strategic importance of these discussions: “Reliable, affordable, and sustainable energy systems are essential to support the economic ambitions of the region.”

The report ultimately calls on governments, multilateral institutions, and the private sector to align their efforts in accelerating power grid development. Doing so would unlock massive co-benefits, including millions of green jobs, enhanced energy security, and broader access to clean, affordable electricity.