Why bilateral power deals are key to making the Asean Power Grid bankable, says OCBC

OCBC is pushing a bilateral-first approach to the Asean Power Grid. A new report from the Singapore Sustainable Finance Association, led by OCBC with Baringa and Hogan Lovells, argues that cross-border electricity projects need binding government agreements before they can attract private financing. The report looks at two corridors in particular: Singapore to Indonesia and Singapore to Sarawak, Malaysia. Singapore plans to import 6 GW of low-carbon electricity by 2035 and has already awarded conditional approvals for 4.4 GW. But developers and lenders face regulatory gaps that make projects hard to finance: no enforceable electricity trade agreement, unclear cross-border renewable energy certificate recognition, short export licences, and questions around subsea cable ownership. The report says the goal is not to remove risk but to allocate it to the party best able to manage it. Without that, imported clean power may stay more expensive than domestic wholesale prices, since projects must cover generation, storage, transmission, financing and backup systems. The report argues that getting one bilateral corridor to financial close would lower the perceived risk for the next one, and that this step by step path is how the wider APG vision becomes real.