One of the many hydropower dams in Laos.

ADB supports Laos in power sector reform

The Asian Development Bank (ADB) has approved a US$3.25 million loan for a technical assistance project to enhance power sector reform in Laos.
The project aims to improve governance and policy reform to create a sustainable and reliable clean electricity supply in the Greater Mekong Subregion.
It will also help pave the way for increased investment and private sector participation in renewable energy.
“Laos has significant potential to scale renewable energy to generate revenue and mitigate climate change impacts, but it needs to promote private sector investment through sound macroeconomic management and structural reforms,” said ADB Country Director for the Lao PDR, Sonomi Tanaka.
“These are needed to build the country’s creditworthiness and accelerate its sustainable public financial management.”
The government is aiming to make Laos a ‘green energy hub’ in the Greater Mekong Subregion.
However, the country’s energy sector is challenged by reform gaps and financial issues, hindering investments in transmission and distribution infrastructure, as well as the ability to meet regional energy transition goals.
The technical assistance initiative under the Power Sector Enhancement for Fiscal Sustainable project will assist the government to modernise power sector regulations, tariff reforms, and governance arrangements.
It also aims to improve market access for private sector participation in expanding clean energy generation; enhance power utilities’ environmental and social safeguard management systems; and strengthen human resource capacity development for implementing power sector reforms.
Laos currently has energy links with Thailand, Vietnam, Cambodia, some other ASEAN member countries, and China, which serve to enhance regional energy security.
One of these is the Laos-Thailand-Malaysia power integration project, under which Laos sells electricity to Malaysia through Thailand’s transmission system.
Installation of the 300MW power integration project was completed in 2021 and now transmits 32,863,055 kWh of energy, worth more than US$2.1 million.
The Laos-Thailand-Malaysia-Singapore power integration project is another important step in multilateral power purchase-sale cooperation to further the goal of an integrated ASEAN power grid.
From the date of signing of the Power Purchase Agreement on June 17, 2022 with a total installed capacity of 100MW, and since starting to supply electricity on June 23, 2022, from December 2022 until now, Electricite du Laos has transmitted about 266,330,000 kWh to Singapore worth a total of US$19.4 million.
However, Laos still lacks adequate transmission systems and other power grid components to adequately modernise electricity transmission and create a strong power delivery backbone across the country.

By Times​ Reporters
 (Latest Update September 30, 2024)