Kitty Bu

While some countries scale back their commitments to renewable energy, Southeast Asia is moving in the opposite direction, accelerating the rollout of clean energy across the region.

Yet, while the spotlight often falls on breakthrough technologies like solar, wind, and battery storage, one of the most essential components of energy transition remains largely underfunded: grid modernization.

Upgrading and expanding the region’s power grid isn’t just a technical necessity; it is also a major economic opportunity. Recent reports estimate that revamping Southeast Asia’s grid infrastructure could generate up to 200,000 jobs and contribute US$25 billion to regional GDP by 2030. But without the right funding structures in place, these gains will remain out of reach.

To explore the question of how the region can unlock the capital needed to scale grid modernization effectively, The Asset spoke with Kitty Bu, vice president for Southeast Asia at the Global Energy Alliance for People and Planet ( GEAPP ).

In this conversation, Bu shared her insights on financing bottlenecks and the types of funding programmes needed to support grid modernization and why renewable energy investments alone aren’t enough without a parallel push to modernize the grid.

The Asset: Can you elaborate on the types of funding programmes and support that will facilitate grid modernization projects?

Kitty Bu: Despite a 900% growth in clean energy investment in developing Asia since 2013 ( reaching US$729.4 billion in 2023 ), grid infrastructure investment still lags behind more developed countries.

To address this gap, multi-stakeholder partnerships are emerging as a potential, viable solution. By combining concessional capital from philanthropic and public sectors with commercial financing, they are proving effective in de-risking grid projects and making them attractive to private investors.

However, Asean utilities still face significant challenges. They require debt financing for cross-border transmission projects, which often cost hundreds of millions to billions of dollars. Restrictive "green taxonomies" imposed by multilateral development banks further complicate access to funding, underscoring the need for new regional financing facilities.

In response, several successful funding programmes are taking shape across the region. These include common-use asset financing approaches for critically important projects, regional transmission investment facilities backed by development banks, and public-private partnership ( PPP ) models designed to manage technical, regulatory, commercial, and political risks.

Tell us about GEAPP’s partnerships with governments, utilities, and financiers for innovative models.

GEAPP is a collective movement started by the IKEA Foundation, the Rockefeller Foundation, and the Bezos Earth Fund. We believe that green energy access in the world’s emerging markets is fundamental to tackling the climate crisis and promoting sustainable economic growth.

So, we make it our mission to unlock green energy access to secure an inclusive and resilient future for all, so that communities, especially the vulnerable ones and economies, can thrive.

Our approach in Southeast Asia is centred around three key parts: collaboration, innovation, and scalable impact. We engage with governments, businesses, and financial institutions to drive systemic change and open investment opportunities to expand energy access for vulnerable communities. We also work closely with these communities to understand their energy needs and deploy our energy systems for last-mile impact.

Through partnerships with [Asian Development Bank] and [Monetary Authority of Singapore], we are developing innovative blended finance structures that mobilize concessional capital from philanthropic and public sectors to de-risk projects and crowd-in private capital globally, creating sustainable financing mechanisms for grid infrastructure.

Beyond financial innovation, the Duet ( Digitalization of Utilities for Energy Transition ) programme focuses on developing comprehensive technology suites, where grid assets are digitally captured with live smart sensors for real-time data, load flow analysis, and reduced transmission losses.

Our partnership's model systematically addresses key barriers, including lack of technical understanding, high capital costs, concerns about consumer cost impacts, and limited access to concessional financing through coordinated multi-stakeholder approaches.

Why is investing in renewable generation without modernizing the grid unsustainable?

Globally, over 3,000 gigawatts of renewable energy projects are queuing for grid connection, with more than 1,500GW in advanced stages. This represents a substantial infrastructure bottleneck that prevents the achievement of net-zero emissions targets.

A key reason for this bottleneck is that current grids were designed for centralized traditional fuel generation, rather than distributed and variable renewable sources. This creates a fundamental infrastructure mismatch, where the deployment of renewable capacity dramatically outpaces the grid’s ability to integrate these new sources.

Without proper grid infrastructure, integrating renewables introduces serious system reliability risks, such as voltage instabilities, frequency inconsistencies, and harmonic distortion. These issues compromise the high reliability standards expected by both industrial and residential consumers.

The consequences are significant: the average grid interconnection timeline for new generation projects now extends beyond five years, with approximately 80% of projects never reaching construction due to grid constraints. This results in substantial stranded asset risks for renewable developers.

To address these challenges, annual investments in grid expansion and modernization must nearly double to accommodate renewable energy growth. However, transmission system expansion faces a projected US$320 billion investment shortfall by 2030, threatening the achievement of renewable energy deployment targets.

Hence, with coordinated action, targeted investment, and innovative approaches to grid modernization, there is a clear pathway to unlock the full potential of renewable energy. Modernizing the grid not only enables reliable integration of renewables but also supports economic growth, job creation, and a resilient, sustainable energy future.

Is there a case for creating a new standalone regional grid modernization fund under Asean or another bloc?

Given the opportunities in renewables and clean energy, anything is possible. But advancing the regional grid modernization, whether it's under Asean or another bloc, requires financing, which no one government can establish alone.

It is estimated that a minimum of US$100 billion for transmission infrastructure alone is needed by 2045, far more than current national or bilateral investment plans can deliver. However, achieving such a fund is not straightforward.

Progress on grid integration in Asean has historically been slow. For example, the Asean Power Grid has taken two decades to move from concept to a handful of pilot projects, with actual financing frameworks only now beginning to materialize.

From GEAPP’s perspective, only if governments and the private sector intensify collaboration, focus on common technical standards, harmonized regulations and frameworks, as well as share practical risk-sharing tools to attract blended finance, then grid modernization can materialize.

The recently launched Asean Power Grid Financing Facility ( APGF ), backed by the Asian Development Bank, World Bank, and Asean governments, shows early promise as a mechanism to coordinate, de-risk, and mobilize capital, providing guarantees and technical support for cross-border grid projects.

Ultimately, for a regional fund to succeed, stakeholders must move towards coordinated action. This means setting measurable investment targets, developing market-ready projects, and building trust through transparent governance. Without this, the region will struggle to deliver real impact for Asean’s energy transition.

What are the most viable public and private funding models to accelerate large-scale grid modernization in Southeast Asia, especially in transmission and digital infrastructure?

The most viable model is a robust PPP, or more inclusively, Public-Private-Philanthropic Partnership ( 4P ). In practice, blended finance schemes within the PPP framework have become increasingly important, as they bring together public, private, and philanthropic capital to de-risk investments and crowd in commercial funding for challenging grid projects.

Blended finance helps absorb the risks that are most likely to deter private investors, from technical uncertainties to regulatory fragmentation, while also facilitating longer tenors and local currency funding. When governments and the private sector pool funding, it is possible to unlock scaled investments for critical grid upgrades, particularly in markets where energy pricing varies and policy uncertainty is high.

However, simply establishing a financing structure is not enough. For blended finance to deliver real impact, governments must also align procurement standards, regulatory incentives, and risk-sharing mechanisms so all stakeholders, from utilities to private developers, see a credible pathway to investment returns and tariff stability.

This integrated approach can ensure new grid investments benefit consumers by delivering affordable, flexible, and resilient energy, regardless of different national price structures or generation mixes across the region.

What governance and regulatory reforms are needed to ensure long-term returns on grid infrastructure investment in Southeast Asia’s fragmented utility markets?

Establishing clear, long-term tariff frameworks with automatic cost-pass-through mechanisms, such as regulatory asset base ( RAB ) models, provides revenue certainty for transmission and distribution operators, encouraging investment.

Unbundling generation, transmission, and distribution functions, as well as empowering independent regulators, enhances transparency, reduces conflicts of interest, and fosters competition in grid services.

In addition, streamlining and digitalizing permitting and land-acquisition processes to target six-month approvals for grid projects will significantly lower development risks and shorten project timelines.

Harmonizing Asean grid standards and mandating integrated planning ensures asset interoperability, lowers costs, and aligns investments with renewables targets – providing investors clarity on utilization and revenue streams.

By embracing these governance and regulatory reforms, Southeast Asia can create a more attractive and secure environment for grid infrastructure investment.