The United States Trade and Development Agency (USTDA) has signed a $2 million grant agreement with the Indonesian National Electricity Company (PLN). The purpose of the agreement is to conduct feasibility studies related to the development of two cross-border electricity interconnections between Indonesia and Malaysia.
This commitment was formalized with the signing of the grant agreement between the two parties on Wednesday (March 6). USTDA will assess the feasibility of electricity interconnections between Sumatra and the Malaysian peninsula (Sumatra Interconnection) and between Kalimantan and Sabah, Malaysia (Kalimantan Interconnection).
This new infrastructure is part of the 18 cross-border interconnections identified in the ASEAN Interconnection Masterplan Study and will be constructed with the support of USTDA funding. The goal of the project is to enable efficient resource sharing, enhance energy security, and support the adoption of clean energy policies and climate change goals in both countries.
Enoh Titilayo Ebong, Acting Director of the USTDA, said at the signing event in Arlington, Virginia, that this cross-border transmission infrastructure will advance energy, climate, and sustainable economic goals in Indonesia and Malaysia. In addition, the project will stimulate widespread benefits across ASEAN member countries and strengthen the interconnection between energy ecosystems in Southeast Asia and industries in the United States.
With these interconnections, Indonesia and Malaysia will be able to share power across their borders, helping to match power supply with local demand and fully utilize the available renewable energy potential. PLN has hired Delphos International, Ltd., a Washington, D.C.-based consulting firm, to advise on the study. They will be working with the Malaysian Electricity Companies, Tenaga Nasional Berhad and Sabah Electricity Sdn. Bhd.
The project is also supported by the ASEAN Energy Center, which involves various stakeholders with interests in both countries. According to Darmawan Prasodjo, President Director of PLN, exploring interconnections plays a critical role in enhancing energy resilience at the national and regional levels, as well as bringing shared prosperity to the Southeast Asian region.
Darmawan notes that this collaboration reflects the resurgence of ASEAN as a united force, which was previously fragmented. He believes that achieving such significant goals can only be achieved through collaboration, as demonstrated by the partnership between PLN and USTDA.
Darmawan acknowledges that interconnection projects present challenges in terms of differing national policies, technical aspects, and commercial considerations. However, he believes that these challenges can be overcome through the unity of all parties involved.
Darmawan also notes that working with USTDA will provide PLN with access to international expertise and resources that will help PLN realize its vision of a more integrated and sustainable power grid throughout the ASEAN region.
