The Power Grid ASEAN Promised Is Starting Across a Few Kilometres of Water — and Nobody Planned It That Way

10 July 2026

On 6 July, President Prabowo Subianto hosted Prime Minister Lawrence Wong at Merdeka Palace for the annual Indonesia–Singapore Leaders' Retreat. The two governments concluded twenty-six agreements, spanning defence, connectivity and education. But Prabowo attached particular significance to one of them: Danantara, Indonesia's sovereign wealth fund and the institution closest to his economic agenda, will lead the export of electricity to Singapore — at least 3.4 GW of low-carbon power by 2035, with prices still under negotiation.

The paperwork is worth a closer look. Danantara's investment arm signed three MOUs: two with Keppel Electric and Sembcorp Utilities, Singapore's established power retailers, covering the purchase of the electricity, and one with Singapore Energy Interconnections, the company Singapore has appointed to develop cross-border links, covering the cable itself. And notice the division of labour. PLN, the state utility that holds Indonesia's generation and transmission monopoly, is not party to the deal. PLN's tariffs are regulated to keep domestic electricity affordable, and an instrument built for that job is the wrong one for pricing exports into Singapore's open market. Danantara can do what the utility was never built to do: negotiate at market prices and carry the project as a long-term investment. Jakarta, in other words, wants this corridor built to commercial standard — and intends it to last.

It is tempting to file all this under the ASEAN Power Grid, the vision of a connected regional network that has been on ASEAN's agenda since 1997. And the grid is, at last, more than a vision. Last October in Kuala Lumpur, the Asian Development Bank and the World Bank Group put the first coordinated money behind it: up to US$10 billion from the ADB over ten years, and an initial US$2.5 billion from the World Bank. The story deserves close attention. But watch how it actually unfolds, not the labels the international bodies attach to it.

The projects are not spreading across the ASEAN map, but instead gathering in one corner of it. Singapore wants to import around 6 GW of low-carbon electricity by 2035 — roughly a third of its supply — and has spent years building the base: two gigawatts of conditional licences for Indonesian imports in September 2024, further approvals since. The generation is rising on islands you can name — Bulan, Galang, Batam — and Riau is becoming, in effect, the city-state's power shed. Across the water in Johor, the special economic zone signed in January 2025 channels land and industrial capacity toward the same centre.

Nobody designed this as a whole. There are two bilateral tracks, running on different instruments, with no coordinating masterplan between them. Yet together they are consolidating a single functional economic region — Singapore, Johor and the Riau Islands, three shores of the same strait that have traded with one another for centuries, now adding electricity to the manifest.

None of this means the power will flow soon. Everything signed on Monday is preliminary: exploratory memoranda, no agreed price, first power expected from 2029 at the earliest, and two legal regimes to navigate along the way. But set that against the alternative. The region's flagship multilateral scheme, the Laos–Thailand–Malaysia–Singapore corridor, took more than a decade to move 200 MW. This single corridor targets seventeen times that. Integration happens where commercial gravity already is.

So for investors, the practical unit is not "ASEAN power integration". It is the region forming around the demand hub: generation and storage rising in the Riau Islands, land and industrial capacity gathering in Johor, the subsea-cable and converter supply chain, and — through the carbon-credits memorandum signed the same day — a route for Indonesian projects into Singapore's compliance market. Twenty-nine years after ASEAN first sketched the grid, its first real stretch is taking shape across a few kilometres of crowded water — which is where the economics suggest it would start.