A shortage of investment in power grid infrastructure is preventing developing countries in Asia and the Pacific from fully reaping the benefits of the energy transition, including enhanced energy security, the creation of green jobs and expanded access to electricity, according to a new report released by the Asian Development Bank (ADB).

The report focuses on the urgent need to develop interconnected and modernised power grids to meet growing energy demand and integrate intermittent renewable energy sources across the region.

Despite the challenges, the analysis finds that the region remains at the forefront of the global shift to clean energy.

Since 2013, clean energy investment in developing Asia has soared by over 900%, reaching $729.4 billion in 2023—representing roughly 45% of global investment.While the People’s Republic of China (PRC) led in investment volume, India and seven other countries in the region recorded renewables making up more than 75% of new energy capacity additions in 2022.

The report, ‘Energy Transition Readiness Assessment for Developing Asia and the Pacific’, is the ADB’s first to assess countries’ preparedness to transform their energy systems.Developed in collaboration with the World Economic Forum (WEF), it draws on the WEF’s Energy Transition Index.Although China leads in many areas, the report highlights notable progress in countries such as Georgia, Malaysia and Thailand, which have strengthened regulatory frameworks to support clean energy.Since 2010, Bangladesh, India and Indonesia have spearheaded efforts to expand electricity access to over one billion people.

Priyantha Wijayatunga, ADB’s Energy Sector Senior Director, stressed the importance of digitalised grid infrastructure for effectively integrating low-carbon electricity into national power systems.

 “With Asia and the Pacific projected to generate two-thirds of global energy growth by 2040, addressing this massive power supply gap will require strong policies, innovative technologies, and long-term financing,” he said.

Roberto Bocca, Head of the Centre for Energy and Materials at WEF, added, “This comprehensive analysis highlights the opportunities and challenges facing developing Asian economies in achieving their energy transition goals. Reliable, affordable, and sustainable energy systems are critical for national and regional economic growth.”

The report highlights that while each country must chart its own clean energy path based on local conditions, enhanced domestic grid connectivity and regional interconnections—particularly in Central West Asia, Southeast Asia, and South Asia—can improve economic efficiency and lower power costs.

These topics, including cross-border energy trading, will be further explored at ADB’s Asia Clean Energy Forum in June.