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Sam Beltran

The United States is pitching billions of dollars in investment to become Southeast Asia’s energy partner of choice, offering gas, grid technology and nuclear expertise as ongoing turmoil from the Iran war sharpens fears of future supply shocks.
Analysts say the push serves American strategic and commercial interests – from opening markets for US liquefied natural gas to countering China’s dominance in big-ticket infrastructure – but also offers the region opportunity.
Washington announced US$1.5 billion in financing through its International Development Finance Corporation (DFC) on July 22, calling the push to build energy infrastructure across the Indo-Pacific the “single largest project investment” in the agency’s history.
The deal was unveiled during US Secretary of State Marco Rubio’s visit to Manila for the Asean foreign ministers’ meeting, alongside a commitment to invest US$2.5 billion across other areas including energy security and future technologies.

“We want to work with Asean as it develops its digital economy and continues to bolster its energy security, and to address other regional challenges, including ensuring that stability and security are preserved,” said Kevin Kim, US ambassador to the Association of Southeast Asian Nations, at a virtual briefing on Friday.
Kim said Washington would “continue to stay heavily engaged on energy-related issues” as the bloc pursued measures such as building strategic petroleum reserves, describing Southeast Asia as “the engine of economic growth in the 21st century with incredible demands for additional energy”.
In addition to the US$1.5 billion fund, Washington wanted to become “a source of diversification for Southeast Asian markets” by offering access to American LNG, US grid technologies and cooperation on small modular nuclear reactors (SMRs), Kim said.
“The US$1.5 billion commitment is significant because it signals that the United States is willing to put substantial financing behind its energy engagement in the Indo-Pacific,” said Tan-Soo Jie-Sheng, director of the Institute for Environment and Sustainability at the Lee Kuan Yew School of Public Policy in Singapore.
He said Washington was using public financing to mobilise private capital “rather than serving as a direct grant to Asean governments”.
That marked a contrast with China’s approach, which paired state-backed financing with its own engineering and construction firms, allowing projects to move faster, said Alnie Demoral, an Asia analyst at energy think tank Ember.
“That’s why the recent US$1.5 billion commitment is a platform, not a list of ready-to-build projects,” she said.

Demoral said the DFC had opened discussions with Vietnam on grid modernisation and Indonesia on energy security, but these remained “pipeline conversations”.
The Philippines is thought to be furthest along in discussions through a fuel terminal at Subic Bay operated by I Squared Capital, a DFC partner.
“These tell me the commitment is credible, but early-stage. The real measure of success is how many of these initiatives move from investment discussions to projects that are actually built,” Demoral added.
Tim Daiss, an energy analyst and founder of Apac Energy Consultancy, said the US funds should be “viewed as a complement rather than a solution”.
US LNG, grid technologies and financing could strengthen diversification, he said, but Southeast Asia’s bigger obstacles remained weak transmission networks, regulatory uncertainty and project execution.
Competing models
America’s motives are unapologetically self-interest – it is, after all, one of the world’s largest LNG exporters, with ample capacity to spare for Asian buyers.
Yet analysts argue such self interest and regional benefit need not be at odds.
“I actually do not think these objectives are mutually exclusive,” Tan-Soo said, noting that greater access to US gas would ease Southeast Asia’s exposure to the single point of failure that is the Strait of Hormuz.

Still, he warned against mistaking diversification into LNG for lasting energy security, saying global price swings, shipping costs and fossil-fuel dependence were still concerns.
Instead, Tan-Soo recommends enhanced adoption of renewables, energy storage, efficiency gains and stronger regional power links.
China, meanwhile, has little to prove when it comes to power grids. It has built the world’s largest ultra-high-voltage transmission network and has manufacturing experience across the grid value chain – a head start that analysts say will not simply disappear because Washington decided to open its wallet.
The SMR race
Washington has also signalled interest in developing small modular reactors with Asean members as it seeks to deepen its role in Asia’s emerging nuclear energy plans.
Earlier this month, the US signed a trilateral agreement with Japan and South Korea to cooperate on SMR deployment, sealed on the sidelines of a Nato meeting.
“SMRs will play a critical role in supplying energy in the future,” Kim said, describing the issue as an “absolute priority” for a Trump administration that was holding “deep discussions” with several Asean governments.
For archipelagic nations like Indonesia and the Philippines, SMRs offer a tantalising alternative to sprawling conventional reactors because they are compact enough to serve scattered island grids, according to Alvin Chew, a senior fellow at Singapore’s S. Rajaratnam School of International Studies.

In Malaysia and Thailand, both positioning themselves as regional data centre hubs, SMRs could offer a dedicated power source for the AI buildout, he added.
Commercial reality lags behind the technology’s promise, however.
Regulation, financing and public acceptance would all affect how quickly SMRs actually appear on the grid, Daiss said.
The US is far from the only supplier vying for influence, either. Vietnam has already picked Russia’s state-run Rosatom to build its Ninh Thuan 1 plant, despite a long-standing civil nuclear cooperation agreement with the US.
Analysts say that plurality of choice means Asean states stand to benefit from competing visions of the region’s energy future – provided they play their hands wisely.
“What matters is that Asean countries stay mindful and make sure any financing into the region works to their leverage, not just one partner’s,” Demoral said.


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A power plant and transmission lines in Thai Nguyen province, Vietnam. The International Development Finance Corporation has reportedly held talks with Vietnam on grid modernisation. Photo: AP

US Secretary of State Marco Rubio holds talks on the sidelines of the Asean Foreign Ministers’ Meetings in Manila on July 23. Photo: Russian Foreign Ministry’s Office/APA Images/Zuma Press Wire/dpa

A intra-province power interconnection project in southeast China’s Fujian province pictured from the air earlier this month. Photo: Xinhua

Ships are loaded with liquefied natural gas at a US facility on the border of Texas and Louisiana. Photo: Handout

Visitors look at a model of a South Korea-developed small modular reactor model at an energy expo in Busan earlier this year. Photo: Yonhap/EPA

Can Southeast Asia survive more Iran war fuel shocks?

Black smoke rises following explosions near a military base hosting US forces in the northern Iraqi city of Irbil, on Friday. Photo: AP

A driver refuels a vehicle with biodiesel containing 50 per cent diesel fuel made of palm oil at a petrol station in Karawang, West Java province, Indonesia, on July 9. Photo: Reuters

Singapore is accelerating electric vehicle adoption through strong policy support and nationwide charging infrastructure. Photo: Peh Siong San / ComfortDelGro Corporation Limited

Vessels at the Strait of Hormuz, as seen from Musandam, Oman, on Tuesday. Southeast Asian economies remain heavily dependent on imported oil and shipping routes connected to the Gulf. Photo: Reuters

Shock absorber: will Asean’s power grid be up to the task by 2045?

The sun sets behind power lines in San Fernando town, Pampanga province, the Philippines, last month. Photo: AFP

A Vinfast electric car on a street of Hanoi. Rising demand for EVs is placing extra strain on national power grids. Photo: EPA-EFE

Workers seen on a construction site for data centre in Malaysia’s Johor state in 2024. Photo: AP

Solar panels on the rooftop of the Marina barrage in Singapore. The Asia-Pacific region generates nearly half the world’s renewable electricity. Photo: AFP

A man walks across the cracked bed of a dried-up pond in Vietnam’s southern Ben Tre province in 2024. Photo: AFP

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Gas exports and mini reactors serve US interests as much as Asia’s – provided promised projects actually lead anywhere


Gas exports and mini reactors serve US interests as much as Asia’s – provided promised projects actually lead anywhere.


Inside America’s US$1.5 billion play for Southeast Asian energy

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Gas exports and mini reactors serve US interests as much as Asia’s – provided promised projects actually lead anywhere

Gas exports and mini reactors serve US interests as much as Asia’s – provided promised projects actually lead anywhere