Laos Woos Foreign Investors to Speed Growth

By Yuthana Praiwan, Bangkok Post, Thailand

Sep. 7–Laos is stepping up efforts to attract foreign investors in its power and mining industries to help speed its economic growth, according to Vilaysone Sourigna, a senior officer for the Ministry of Energy and Mines.

“We would like to promote power generation exports to provide revenues to meet the government’s development objectives to eradicate poverty,” he said at the Powering Asean seminar yesterday in Bangkok.

Mr Vilaysone said the Vientiane government expected to see at least 20 new hydropower projects funded in part by foreign investors in the near future.

Private investors will need to submit business plans to the government as it has no bidding policy. Investors also need to be aware of any agreements between the Laotian government and the governments of their home countries.

The Vientiane government’s policy is to hold stakes of 15 percent to 30 percent in high-potential ventures. It holds 30 percent in the largely Thai-funded Huay Ho hydroelectric dam project, which has generated direct revenue of US$60 million for the state to date.

Currently, Thailand is the only major electricity buyer from the 210-megawatt Theun Hinboun power project and the 150MW Huay Ho plant in Laos.

The two governments signed an agreement last year to develop an additional 5,000 MW of hydropower capacity by 2015, with another 2,000 MW by 2020 now being discussed.

“We are situated among neighbouring countries where demand for electricity is steadily increasing,” said Mr Vilaysone.

He said the main priority was to increase the country’s income from foreign direct investment (FDI), while also creating employment, earning land-leasing fees and royalty payments from mining.

Laos expects to obtains loans from the Asian Development Bank to build up its national power grid by 2012.

Laos has huge potential in electricity, estimating that major tributaries flowing into the Mekong River could generate at least 15,000 MW of power.

In addition, its massive lignite coal reserves have attracted investors, among them the SET-listed miner Banpu Plc.

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