Laos could be Southeast Asia’s key RE electricity supplier

Vietnam and Malaysia partnered with Laos to boost renewable energy partnerships.

Laos is poised to gradually become a key renewable electricity supplier in Southeast Asia due to the country’s progress in expanding its power generation allotted for exports.

In a report, BMI noted that Laos is pushing through with its hydropower dam projects despite opposition over environmental and social concerns.

One of the projects was the Luang Prabang Hydropower Project which will start operations in 2030 despite its potential impact on the UNESCO-listed Luang Prabang town.

The country has also signed a 29-year power purchase agreement for the 770-megawatts Pak Lay hydropower project which is expected to displace around 3,500 residents.

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“We highlight that this shows the market’s resolve to advance the expansion of the hydropower sector, though there are social and environmental concerns which we highlight as downside risks,” the report read. “These concerns have not dampened the interest from Southeast Asian peers to engage in electricity trading with Laos.

“We believe that these ambitions will gradually grow the market to be a key supplier of renewable electricity in the region,” BMI added.

Vietnam Electricity proposed in September to increase electricity import capacity with Laos due to electricity concerns for 2025 onwards, whilst Malaysia’s Tenaga Nasional Berhad partnered with Electricite du Laos to reinforce renewable energy trade starting in 2025.

However, BMI noted that aside from the domestic sentiment on the construction of hydropower dams that could start the projects’ progress, weak public finances, and persistent fiscal and external deficits were amongst the risks to the expansion of its power sector.