WSHPDR_2013_Final_Report-updated_version

The International Finance Corporation (IFC) is
contributing alongside MEM to develop village hydro
generator sets with stand-alone systems and a minigrid.
Several project proposals including feasibility
studies have been proposed by potential developers
and it is expected that public private partnerships will
be developed under the Rural Electrification Program
and support from the REF. 9
Renewable energy policy
The Laotian Government promotes the development
of large hydropower facilities, hoping to export
electricity to neighboring countries (in particular
Thailand), and thereby achieving significant national
income while providing energy security at low tariffs
for its population. 10 Additionally it encourages:
Policies facilitating private sector investments in
rural electrification such as the provision of
incentives and financing.
The development of small hydropower systems,
bio-fuel, solar, biomass energy at village level to
provide electricity and energy to rural and remote
communities.
In developing a complementary policy for off-grid
rural electrification, the Government initially focused
on the introduction of Solar Home Systems (SHS), but
more recently it decided to include small hydropower
systems. 5 So far, through its off-grid rural
electrification policy, the Government has installed
around 15,000 SHS in remote areas. The private
company Sunlabob Renewable Energy Ltd has
introduced an additional 5,000 PV systems. 5 Small
hydropower has contributed heavily to rural
electrification based on individual investment on pico
hydro units in the Northern regions (47,000
turbines). 10
Legislation on small hydropower
The Draft Renewable Energy Development Strategy of
Laos (December 2011) includes a series of proposals
and recommendations with regard to the promotion
of small hydropower, as well as biofuels, solar, biogas,
wind energy and alternative energy sources for
transport. Promotion and development of small
hydropower in particular addresses units with a
capacity below 15 MW.
hydropower receives less attention due to lack of
commercial opportunities, making it less
attractive to both public and private investors. 10
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook.
2. Theuambounmy, H. (2007). Country paper: rural
energy development and utilization. Greening the
Business and Making Environment a Business
Opportunity. 5 June to 7 June. Bangkok.
3. World Bank (2012). Power to the People: Twenty
Years of National Electrification. The International
Bank for Reconstruction and Development. Available
from
http://siteresources.worldbank.org/INTEAPASTAE/Res
ources/LaoPDR-PowertoPeople.pdf. Accessed August
2012.
4. International Energy Agency (2011). The World
Outlook 2011. Available from www.iea.org/.
5. Nippon Koei (2010). Rural Electrification Master
Plan and Hydro Assessment Studies in Lao PDR.
6. Vongsakhamphoui, S. (2011). Laos: The land of
renewable energy opportunity. InWind Chronicle, Vol.
7, No. 3, June-July.
7. Laos Department of Electricity, Ministry of Energy
and Mines (2009). Electricity Statistics Yearbook.
Available from
www.poweringprogress.org//download//STATISTICS%
20OF%20ELECTRIFICATION%20RATE%20IN%202009.p
df.
8. Smits, M. and Bush. S. R. (2010). A light in the dark:
The practice and politics of pico hydropower in the
Lao PDR. Energy Policy, 38, 116-127.
9. Lao PDR Ministry of Energy and Mines Department
of Electricity (2011). Mission Report - Renewable
Energy Development Strategy: Strengthening the legal
and regulatory framework – Preparation of three draft
decrees on solar, biomass and biogas.
10. Lao Institute for Renewable Energy (2011).
Personal Communication, January.
Barriers to small hydropower development
Concentration of few actors involved in off-grid
electrification. 8 In the short term, any significant
innovations to off-grid electrification will emerge
from the collaboration of the Laotian Government
and World Bank, along with the private sector,
since other actors have had only a minor
influence in this field.
Financial challenges. While large hydropower
projects attract increased foreign interest and
investment, small scale hydropower and pico
279