Power grids in Southeast Asia urgently need more investment and urgent reforms to expand and modernise, says the report.

Grid reforms vital to powering Southeast Asia’s green growth

SINGAPORE (The Straits Times/ANN) --  Southeast Asia risks missing out on billions of dollars of green investment because its underfunded power grids are failing to keep pace with surging energy demand, a report released warns.
The report by Bain & Company and Standard Chartered bank says the region is facing a crunch point. Investors are lining up to invest in data centres, renewable energy, green industrial parks, and electric vehicle (EV) production and infrastructure. But most power grids in Southeast Asia have limited regional interconnections and are not adapting fast enough to meet the rapid electrification of economies.
Some investors are deterred by long grid connection times, lack of policy clarity, and rigid rules of bureaucratic state-run power companies in the region, home to nearly 700 million people and one of the world’s fastest-growing energy markets.
The region’s grids urgently need more investment and reforms to expand and modernise, says the report. Many are governed by a hotchpotch of inflexible rules limiting private operators and a lack of innovative power purchase agreements. Long grid connection times also frustrate investors, such as data centre developers who cannot afford to wait several years.
The constraints are already affecting clean energy projects. For example, between 50 percent and 60 percent of renewable energy projects in Vietnam, Thailand and Indonesia have been cancelled between 2021 and 2025 because of system constraints, including unclear power-purchase agreement structures, permitting hurdles and grid connection rules, the authors note.
Grid investment has failed to keep pace with demand growth. Annual investment in power transmission and distribution fell 3 percent between 2015 and 2025 in South-east Asia, even as investment grew by 10 percent annually in the European Union and 8 percent in the United States.
Southeast Asia should be spending US$29 billion (S$37 billion) a year on grid infrastructure but is investing only US$11 billion. This leaves an US$18 billion annual investment gap, putting the region’s growing green economy at risk.

(Latest Update May 20, 2026)