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February 7, 2024

Laos: Hydropower and Energy Sharing amidst the ASEAN Chairmanship

February 7, 2024

Laos’ national debt remained well above 100% of GDP at the end of 2023. This figure can be largely attributed to opaque loans from Chinese developers investing in the country’s dam and hydropower plant infrastructure. What has prevented a complete fault on these loans and an outright recession are BRI (Belt and Road Initiative) debt extensions, but what will prevent cyclical debt crises is a more coordinated revamping of hydropower infrastructure and energy storage that together provide consistent revenue.
The seasonality of the hydropower industry implies that Laos runs an energy production surplus in the wet season and a deficit in the dry season. Underdeveloped electrical transmission grids and a lack of power storage facilities result in an inability to maintain sustainable domestic energy levels as well as consistently profitable exports to neighboring ASEAN states. These barriers prevent Laos from making regular repayments to foreign developers and being the "Battery of Southeast Asia” it strives to be through regional energy exportation and sharing.
Simultaneous to the start of Laos’ ASEAN Chairmanship and launch of the country’s Visit Laos 2024 tourism campaign, the government is renovating and streamlining its hydropower infrastructure, particularly in southern provinces such as Sekong. With more than 50 fully equipped, storage-capable stations in the works, new concerns revolve around the disruption of natural water cycles and overdevelopment of pristine reservoirs. Leaders will have to balance commercial and environmental priorities if Laos is to meet its multifaceted goals for 2024.

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