China helps Laos tap potential of electricity exports

China-Laos energy cooperation has brought new development opportunities to remote villages in the Southeast Asian nation's mountainous regions, assisting the hydropower-rich nation to leverage its water resource and boost electricity export, business representatives said on Tuesday.

The comments came as Thongloun Sisoulith, general secretary of the Lao People's Revolutionary Party Central Committee and Lao president, kicked off a state visit to China.

Observers said that Chinese investment, which accounts for roughly 70 percent of that going into Lao hydropower plants, is a vivid display of how the two countries have fostered cooperation under the Belt and Road Initiative (BRI) and the Lancang-Mekong Cooperation mechanism, with Sisoulith's visit set to inject new momentum into bilateral economic ties and bring the fruitful partnership to a new height.

In November, Power Construction Corp of China (PowerChina) signed a contract with a Lao company to construct a 600-megawatt (MW) wind power plant in southern Laos, according to PowerChina.

It is the first wind power project in Laos, and it will export electricity to Vietnam, the first time that Laos will engage in cross-border transmission of green and renewable electricity.

The PowerChina deal offers a clue into the role Chinese companies have played in aiding Laos, which sits at the mainstream of the Mekong River and aims to harness this edge to make itself the “battery of Southeast Asia,” to tap its 26,000 MW hydropower potential.

Last year, Lao hydropower plants generated 8,349 MW of electricity, accounting for one-third of the potential capacity, according to the International Renewable Energy Agency.

At the national level, the combined investment by PowerChina accounts for over 12 percent of Laos' total electricity supply, and its electricity capacity represents 30 percent of the country's total in the dry season, according to media reports.