Laos, Japan Spark Changes in Power Development Governance

June 18, 2012

Vientiane Times

Investment in the development of Laos’ power sector from now until
2030 is expected to be 480 trillion to 560 trillion kip (US$60 billion
to US$70 billion).

“By that time, Laos may have installed capacity of about 20,000MW,”
Energy and Mines Deputy Minister Mr Viraphonh Viravong told a
Vientiane Times reporter on Friday. Mr Viraphonh was speaking at a
workshop held in Vientiane on the ‘Project for the Improvement of the
Governance Mechanism for Sustainable Power Development Planning’.

Authorities and energy developers from the Energy and Mines Ministry,
JICA, EDL, Chubu Electric Power Co Inc and J Power at the workshop on
Friday.

Another Energy and Mines Deputy Minister, Mr Khammany Inthirath, said
recently that Laos is targeting installed capacity of 3,856MW by 2015.
Laos currently has 16 hydropower plants with installed capacity of
2,559.7MW.

A recent publication on renewable energy development strategy in Laos
noted that hydropower is the most important energy resource, with
potential estimated at about 26,000MW, with yet-to-be counted small
scale hydropower sites below 15MW though to have a potential of about
2,000MW.

Mr Susumu Yuzurio, Senior Representative of the Japan International
Cooperation Agency (JICA) Laos Office, said at the workshop that Laos,
dubbed ‘the battery of Indochina’, holds enormous potential for
hydropower, which is many times greater than domestic peak demand and
also the demand projected for 2020.

Power development was previously undertaken solely by the national
power utility Electricite du Laos (EDL), but now independent power
producers (IPPs) are taking a major role as a result of deregulation
in the 1990s.

Around 85 percent of power generation capacity in Laos is owned by
IPPs as of 2010, and this share is expected to increase.

“According to the Power Development Plan, about 90 percent of power
generation capacity will be developed by IPPs over the next ten
years,” Mr Yuzurio said. “These hydropower projects, especially for
large scale export-oriented ones, enable rapid and robust economic
growth in this country.”

The workshop kicks off a project study, which runs from this month
until May 2013, to propose a more comprehensive and reliable Power
Development Plan and propose an institutional and human resource
development programme to enhance power sector governance, according to
a press release.

The project team consists of members from two Japanese electric power
companies, namely Chubu Electric Power Co Inc and J Power.

Mr Yuzurio said the project would play a key role in the cooperation
programme to improve policies, laws, regulations and coordination
procedures, improve the effectiveness and transparency of procedures
of power development by IPPs, and mobilise resources with preferable
conditions such as grants and concessional loans for facility
development.

The project will enhance power development planning capacity, which is
regarded as a fundamental function of the power sector administration.
It also intends to come up with appropriate measures to increase
efficiency and transparency of power development mechanisms by IPPs.

“Through reviewing the present Power Development Plan, our expert team
will identify potential power development projects which may be
applicable for Yen-loan assistance,” Mr Yuzurio said.

Mr Viraphonh said investment in electricity from now until 2030, as
estimated by Japan’s Institute of Energy Economics, would be in the
order of about 160,000 trillion kip (US$20 trillion) globally, with
about 72,000 trillion kip (US$9 trillion) in the Asia region.

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