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Thailand: No Purchase Agreement for Electricity from Five Projects in Laos Until Conclusion of Talks

  • Buasawan Simmala
  • Dara Baccam

Thai Prime Minister Somchai Vongsavath asserted that Thailand will not officially agree to buy electricity from five power projects that are being built in Laos until after the conclusion of the current price negotiations. Talks about new purchase agreements are ongoing between EGAT or the Electricity Generating Authority of Thailand and the investors of the five projects who said they needed a price hike because of higher construction costs due to rising prices of construction materials.

The lack of agreement between officials of both parties on this issue has put off at least another year the completion of these five power projects, meaning it will be 2015 before Laos can start exporting to Thailand the electricity generated by these dams - namely the Nam Ngum II, Nam Ngiep, Nam Ou, and Nam Theun I hydropower projects, and the Hongsa lignite project.

Meanwhile, in a move to show its perception of the importance of Laos’ energy development for exports to Thailand, the Asian Development Bank (ADB) agrees to provide Laos with a US$ 47 million loan to enable Laos to pay for its share in the investment of the 440-megawatt Nam Ngum III hydropower project, a joint investment with Thai and Japanese investors in which the Lao government holds a 23% stake. This ADB loan is significant to Laos’ plans to promote foreign investments in power projects to enable it to export as much as 8,000 megawatts of electricity from as many as 29 power projects, as well as to provide electricity to up to 90% of Laos’ total households by 2020. Currently, Laos is able to meet the energy needs of only 59% of the more than 1 million households across the country, living mainly in urban areas.

Listen to Songrit's report for more details in Lao.

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