Sarawak key to ASEAN's green energy push
Prime Minister Datuk Seri Anwar Ibrahim reportedly said that Sarawak has the potential to become the main energy hub for Malaysia and ASEAN. The state could also play a key role in the APG initiative with its rich energy resources, including hydropower, gas and hydrogen.
Trung Ghi, Arthur D. Little Southeast Asia partner and head of energy, utilities, and resources practice, said the tripartite cooperation of this scale strengthened regulatory alignment and accelerated institutional readiness.
The move comes as Sarawak eyes a nearly threefold increase in renewable energy capacity to 15 gigawatts (GW) by 2035, positioning the state as a regional energy anchor.
According to Sarawak Energy's 2035 Strategic Plan, this expansion includes continued hydropower development, solar scale-up, and hydrogen deployment.
'The 15GW target is ambitious but feasible with the right enablers. Continued hydropower development, solar scale-up and hydrogen deployment will be critical. If realised, it would significantly boost Sarawak's export capacity while enhancing domestic energy security,' Trung told Bernama in a written interview recently.
Malaysia is currently exploring two cross-border transmission routes – one overland via Peninsular Malaysia and another via a direct undersea cable to Singapore.
Trung said the route that secures financing, permits and offtake agreements first is likely to move ahead. 'Cost-efficiency and geopolitical alignment are key considerations. A route through Peninsular Malaysia may be quicker and cheaper, while direct access to Singapore's premium market could offer higher commercial returns,' he added.
However, executing such projects across multiple jurisdictions remains complex, he said. Land acquisition, environmental clearances, maritime regulations and harmonisation of grid codes are just some of the challenges ahead. 'Continued coordination among governments, regulators and industry players will be critical,' stressed Trung.
Despite heavy reliance on fossil fuels across ASEAN, the regional power grid offers a long-term structural solution for emissions reduction, if infrastructure, regulation and markets are effectively aligned.
In May, ASEAN Secretary-General Dr Kao Kim Hourn reportedly said the APG vision requires an estimated investment of US$764 billion (US$1 = RM4.23) for power generation and transmission infrastructure.
'Mobilising this level of capital will demand a stable regulatory environment and clear project pipelines,' Trung said. To support this, the ASEAN Power Grid Finance Facility Framework, jointly developed by the Asian Development Bank (ADB) and the World Bank, is expected to be launched at the ASEAN Summit in October 2025. 'The ADB has signalled its willingness to commit up to US$10 billion for cross-border energy infrastructure,' Trung added.
Looking ahead, Trung reckons Sarawak's success could offer a blueprint for other sub-regional linkages, such as Thailand–Laos–Cambodia and Indonesia–Brunei–Peninsular Malaysia. 'While each region has different dynamics, the idea of linking surplus generation to high-demand centres through cross-border infrastructure can be adapted and replicated,' he added.
Trung also noted that ASEAN could draw lessons from Europe's ENTSO-E network and China's Belt and Road Energy Corridor, particularly in terms of central coordination, technical harmonisation and investor confidence.
Climate finance instruments, including green bonds, blended finance and carbon-linked mechanisms, are also expected to play a growing role in bankrolling the region's clean energy transition, according to Trung. 'Green bonds can reduce financing costs for infrastructure, while blended finance and carbon credits help address early-stage risks and monetise emissions reductions,' he said.
As the APG gains traction, he said Sarawak's hydropower-driven export model could play a defining role in transforming the region's energy landscape, marking a turning point in the pursuit of sustainable growth and energy resilience. — BERNAMA
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