ADB Targets $70B for Asian Power Grid Integration, Data Centers

The Asian Development Bank (ADB) said it aims to mobilize $50 billion in financing to help Asia-Pacific countries build cross-border electricity grids and an additional $20 billion to support data center growth in the region.

The multilateral lender's $70-billion package for the Pan-Asia Power Grid Initiative and the Asia-Pacific Digital Highway, announced at its yearly meeting in Samarkand, Uzbekistan, is to be rolled out through 2035.

"By linking power grids and digital networks across borders, we can lower costs, expand opportunity, and bring reliable power and digital access to hundreds of millions of people", ADB president Masato Kanda said in an online statement issued by the Philippines-based bank.

"The Pan-Asia Power Grid Initiative will connect national and subregional power systems so renewable energy can flow across borders, while the Asia-Pacific Digital Highway will help close the digital infrastructure gap and enable the region to benefit from AI-driven growth", ADB said.

"By 2035, ADB aims to integrate about 20 gigawatts of renewable energy across borders, connect 22,000 circuit-kilometers of transmission lines, improve energy access for 200 million people, create 840,000 jobs, and cut regional power sector emissions by 15 percent", it said.

ADB expects to shoulder about half of the $50 billion and raise the rest including through the private sector.

"Up to $10 million in technical assistance will support efforts to align regulations, adopt common technical standards, prepare feasibility studies and advance other work needed for major projects", it said.

Last month ADB announced around $25 million in initial funding for the ASEAN Power Grid, which targets Southeast Asian power grid integration by 2045. The initial funding will come from the governments of Australia, Canada, Germany and the United Kingdom, as well as the European Union.

"At a time when the region faces rising energy demand, supply uncertainties and the urgent need for a cleaner energy transition, regional cooperation has never been more critical", ADB said in a press release April 16.

"This is why the ASEAN Power Grid is essential - enabling cross-border energy connectivity to strengthen resilience, enhance energy security and optimize the region’s resources".

For the project, a trust fund called the Regional Connectivity Fund for Energy in Southeast Asia (RCF) has been launched as a partnership between ADB and member governments of the Association of Southeast Asian Nations.

"To accelerate the ASEAN Power Grid, the RCF will channel international support into project preparation, technical studies, and capacity-building, creating a strong pipeline of investment-ready projects and helping to crowd in larger pools of public and private capital", ADB said.

Meanwhile the Asia-Pacific Digital Highway will fund "digital corridors, data infrastructure, and AI-ready economies", ADB said.

"Investments will focus on connected infrastructure, including terrestrial and subsea fiber networks, satellite links and regional data centers", it said.

"ADB will also provide policy and regulatory support, including on cybersecurity risk management, and invest in skills programs to strengthen digital and AI readiness.

"By 2035, the initiative aims to provide first-time broadband access to 200 million people and faster, more reliable digital connectivity for another 450 million people across the region.

"It is expected to cut connectivity costs in remote and landlocked areas by about 40 percent and help create 4 million jobs".

ADB expects to bankroll $15 billion of the total $20 billion and raise the remainder including through private sector partnerships.

Additionally the South Korean government is contributing $20 million for the creation of the Center for AI Innovation and Development to support the Asia-Pacific Digital Highway initiative. The Seoul facility aims to offer training in digital and AI-related skills to about 3 million people by 2035, ADB said.

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