Laos intends to become the hydroelectric battery of a power-hungry Southeast Asia. With regional growth at around 6% annually over the next decade, the requirement for energy is huge.
Laos’ power ambitions are laid out in its Seventh National Socio-Economic Development Plan for 2011-15. In the document, the government outlines its plans to build 10 hydropower plants, generating some 5015MW of electricity.
“In 2006, the country had 10 hydropower plants producing 700 MW. Today it has over 16 plants producing north of 2,540 MW,” Xavier de Nazelle of Aloe Private Equity, an investment company that focuses on clean energy and eco-processes, told CNBC.
And foreign investors are keen to enjoy a slice of the return. According to data from the Ministry of Planning and Investment, between 2001 and 2009, US$4 billion worth of foreign direct investment went into electricity generation or 34% of all FDI into the country. “The amount of foreign investment coming into the country is almost twice that of GDP, and the majority is for hydropower,” De Nazelle said.
Laos benefits from abundant water resources, including the Mekong River, as well as its mountainous terrain, which provides constant and reliable currents.
Until 2030, electricity demand in Laos is expected to grow by 7.7% annually while supply is forecast to expand by 12.1%, enabling the country to export the surplus to countries such as Thailand, Vietnam and Cambodia.
