Hydroelectric projects will galvanize development

Laos on track to become the 'Battery of Southeast Asia'

Given its plentiful water resources and strategic location at the heart of Southeast Asia, Laos' energy generation capacity is concentrated on hydroelectric power stations that produce clean and renewable electricity for domestic users and for export to several neighbors.

With a wealth of rivers and waterways in the Mekong Basin, Laos wants to become the "Battery of Southeast Asia" by exporting electricity from an energy sector that has grown steadily and attracted substantial FDI in the past decade.

Billions of dollars more have been earmarked for the industry under the 2012-22 Long-Term Power Development Plan.

The government has afforded the power sector priority status due to its importance for infrastructure and socioeconomic development, highlighted by the expansion of the village electrification plan that is boosting living standards for people in rural areas. By 2020, the government aims to provide electricity to 90 percent of Laos households and these efforts are well ahead of schedule with 88 percent of households already reached.

Meanwhile, the national hydropower development plan features more than 70 large new dams, of which around a dozen are already under construction and more than double that number are presently in the planning stage.

"We have many water and natural resources and more than a third of the water in the Mekong River flows from other rivers and there is potential for us to do additional hydropower projects, which are already a very important source of revenue," said Laos Deputy Prime Minister, Somsavat Lengsavad.

"Before construction of any dam project the government makes sure that the social and environmental impact is assessed properly. One of our projects that received funds from the World Bank has turned out to be a model project when it comes to hydroelectric energy. Currently, Laos is in the process of building other plants along the Mekong River."

Spearheading innovation and growth in the industry is Electricit du Laos, or EDL, a progressive corporation that operates under the Ministry for Energy and Mines. The organization owns and operates the country's main generation, transmission and distribution assets and manages electricity imports into its grids and exports from its stations.

Sisavath Thiravong, EDL Managing Director and CEO, outlines his company's responsibilities and project portfolio.

"The energy sector is very important and every year our need for power increases," he said. "Luckily, Laos has many natural resources and this has allowed us to develop more than 100 power projects and our capacity is now more than 20,000 megawatts.

"Hydroelectric power is a very clean and seen as the energy of the future. It is also relatively cheap. For the long term, it provides good income for the country. We need different sources of energy and link energy capabilities within the region.

"We can supply energy but are looking for new alternatives. Because our population is not large we can produce power for the national economy and supply other countries in the region. As we continue to produce more electricity we want to take our energy and sell it to other countries."

The senior executive emphasizes his company's overwhelming objective is to improve the quality of living for the country's citizens and highlights how the firm is learning about the best practices from other countries such as China and trying to minimize any negative environmental or social impact surrounding new projects.

"Laos and China are really close," he stated. "At the moment, we work with many Chinese companies since they have the technology and experience. For EDL, it is vital to continue our fast growth at the pace of demand. If we finish our entire projects we can get more benefits. This is positive for us and the country.

"We need more investment and are looking to become stronger in the next 5-10 years. Afterwards, we will try to export our energy.

"We have lots of resources. We just have to make sure that how we develop them keeps in mind the country and the people. We need to think about the long term. We need to grow, but also to improve people's quality of life.

"We can be the gateway to other Asian countries for China."

InFocus provided the story