The $300 billion gap in ASEAN cross-border transmission financing is not a political problem.

It is a legal one - written into the domestic electricity laws of the countries that signed the agreements.

Cross-border transmission interconnectors require large upfront capital from private lenders.

Private lenders require sovereign guarantees to protect their debt from currency risk and political expropriation.

But the domestic electricity laws of the participating nations legally restrict the issuance of sovereign guarantees for cross-border merchant infrastructure - infrastructure that generates revenue in foreign currencies, located outside national territory, and outside the political control of the guaranteeing government.

No sovereign will legally underwrite that risk.

No private lender will deploy capital without the guarantee.

The financing deadlock

The IEA Report Financing the ASEAN Power Grid identifies a funding gap of exactly $300 billion for 50 new cross-border lines.

Indonesia's Electricity Law 30/2009 and Viet Nam's Electricity Law 2024 contain provisions that legally prohibit the assumption of international merchant risk at the sovereign level.

The diplomatic ambition is quantified.

The legal constraint that prevents its execution is written into the same national frameworks the signatory governments themselves enacted.

The fiscal argument

Finance ministries will note that issuing sovereign guarantees for infrastructure in a neighbouring country exposes domestic taxpayers to foreign exchange liabilities over assets they cannot control, inspect, or repossess.

This is a legitimate fiduciary objection.

The problem is that signing binding regional power-sharing treaties without a mechanism to fund the physical infrastructure converts the diplomatic achievement into a liability - an expectation of supply that cannot be met.

The reform option

A centralised multilateral sovereign guarantee fund, structured outside individual national debt limits and capitalised proportionally by participating governments, would break the deadlock.

Until the legal risk allocation is fundamentally renegotiated, regional power grids will remain what they currently are: a set of agreements about electricity that requires copper to exist, and no legal mechanism to buy it.