Masato Kanda: ADB to allocate $70B to connect Asia's power grids, digital networks

The Asian Development Bank (ADB) is launching a major $70 billion initiative aimed at connecting energy systems and digital networks in Asia, ADB President Masato Kanda said at a press conference during the bank's 59th annual meeting of the Board of Governors, Report informs.

He stated that by 2035, ADB will support energy and digital infrastructure projects totaling $70 billion.

"The initiative aims to connect energy systems, develop cross-border electricity trade, and expand broadband access in the Asia-Pacific region.

Access to energy and digital technologies will shape the region's future. These initiatives form the foundation for sustainable growth, competitiveness, and integration. By connecting energy systems and digital networks across borders, we can reduce costs, expand opportunities, and provide reliable energy and communications for hundreds of millions of people," Kanda noted.

He emphasized that the Pan‑Asia Power Grid Initiative (PAGI) envisions the interconnection of national and subregional power grids, which will enable the efficient redistribution of renewable energy between countries. Meanwhile, the Asia-Pacific Digital Highway aims to narrow the digital divide and create the foundation for an AI-driven economy.

PAGI plans to mobilize $50 billion by 2035 for the development of cross-border energy infrastructure. This includes the construction of transmission lines, substations, energy storage systems, and grid digitalization. The initiative also encompasses generation projects, including green energy exports, the creation of regional energy hubs, and hybrid generation and storage facilities.

"By 2035, ADB expects to integrate approximately 20 GW of renewable capacity across borders, build 22,000 kilometers of transmission lines, improve access to electricity for 200 million people, create up to 840,000 jobs, and reduce emissions in the region's energy sector by 15%.

The bank intends to provide approximately half of the required financing ($25 billion) from its own funds, with the remainder mobilized through cofinancing, including from the private sector. An additional $10 million will be allocated for technical assistance, including regulatory harmonization, standard development, and feasibility studies," the bank's president said.

The Pan‑Asia Power Grid Initiative reflects the transition from bilateral ties to a regional model of electricity trade and builds on existing cooperation formats, including programs in South and Southeast Asia, as well as within CAREC.

The second part of the initiative, the Asia-Pacific Digital Highway, aims to mobilize $20 billion by 2035. The funds will be used to develop digital corridors, data transmission infrastructure, and the creation of digital economies ready for AI adoption.

According to the ADB president, the investments will cover the construction of terrestrial and submarine fiber-optic lines, the development of satellite communications, and the creation of regional data centers. ADB will also provide regulatory support, including cyber risk management, and finance training programs in digital technologies and artificial intelligence.

"By 2035, the initiative is expected to provide basic broadband access to 200 million people and improve connectivity for another 450 million. This will reduce communications costs in remote and landlocked countries by approximately 40% and create up to 4 million jobs.

Of the total $20 billion, ADB plans to provide $15 billion from its own resources and raise an additional $5 billion through cofinancing. An AI Innovation and Development Center will also be established in Seoul with $20 million in support from the Government of the Republic of Korea. The center will promote the responsible implementation of AI and train approximately 3 million specialists by 2035," concluded Kanda.