Efforts to improve the environmental and social sustainability of southeast Asia’s hydropower sector took a step forward this week with the signing of an agreement by the Lao People’s Democratic Republic and International Finance Corporation.
The partnership will launch what the IFC calls Lao PDR‘s “first cumulative impact assessment” in the Sekong River Basin, which is shared with neighbors Vietnam and Cambodia. IFC said the study and additional actions will help spur private sector investment into Laotian renewables.
Located in southeastern Laos, the Sekong River Basin is of particular interest as it is could become home to a number of significant projects as the Asian country continues its development of large-scale hydro and wind projects.
“We are encouraging new developments in the energy sector that support Lao PDR’s socio-economic development,” said Dr. Daovong Phonekeo, Director General of Laos’ Ministry of Energy and Mines. “Lao PDR’s 2030 power vision focuses on the development of all renewable resources based on competitiveness, sustainability and efficiency.”
Lao PDR’s relationship with IFC stems to 2012, when IFC — alongside the Australian government — began providing guidance for the country’s hydro sector. IFC then established the Lao PDR’s Hydropower Developer’s Working Group in 2014 to help drive private sector sustainability. Similar groups have since been instituted in Myanmar and Pakistan.
“Our partnership with IFC is unique as it closely engages the private sector and will help strengthen our awareness of the business case for environmental and social sustainability when working with companies,” Phonekeo said.
Room to grow
Laos has long been a hotbed for hydroelectric development, with the country having one of the highest potentials for hydro capacity in the region at an estimated 26,000 MW.
Still, government officials are eager to grow the Laos’ hydro market even further, with only about a third of that potential having been realized. Statements made earlier this week by Minister of Energy and Mines Khammany Inthirath indicate Laos could have a cumulative hydro output of about 14,000 MW by 2021.
The hydro boom would continue Laos’ ongoing effort to make itself the “battery of the region.” The country already power to Thailand, Vietnam, Cambodia, China and Myanmar.