Chinese take over Laos’ national power grid

Laos is referred to as the “battery of Southeast Asia” due to its many hydropower plants exporting electricity

The government of Laos has signed a deal with a Chinese company under which the latter will take majority control of Laos’ energy grid system, Reuters reported.

The deal comes as the country has begun struggling with debt repayments to its main international creditors, namely China, and has even maneuvered itself on the brink of a sovereign debt default.

The power grid shareholding deal was signed on September 1 between state-owned Ėlectricité du Laos (EdL) and China Southern Power Grid Co, according to Chinese state news agency Xinhua. Insiders said that the agreement would give the Chinese majority control of a newly founded operative company called Ėlectricité du Laos Transmission Company Limited.

The ownership of the grid is crucial as power exports are a main driver for the development plans of Laos, which is often referred to as the “battery of Southeast Asia” due to its many hydropower facilities.

EdL, which carries a debt burden of around $8 billion, would get better bargaining power with regional countries because of the Chinese majority ownership and potentially start making a profit, the insiders said.

Planned investments of $2 billion

The new company will operate under Lao government regulation, Xinhua reported, but would take advantage of China Southern Power Grid’s “financial strength and mature experiences in power grid construction, operation and management.”

According to Vientiane Times, the Chinese would invest about $2 billion in the local grid in Laos and international connections.

Overall, total Chinese investment in power, transport, a border economic zone and other projects in Laos already totals over $10 billion, according to Xinhua. Second comes Thailand with less than half of this amount.

A study published in 2019 by the Australia-based Lowy Institute put Laos’ debt to China at 45 per cent of GDP which could result in a strong economic and eventually political dependency, observers noted.



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Laos is referred to as the "battery of Southeast Asia" due to its many hydropower plants exporting electricity The government of Laos has signed a deal with a Chinese company under which the latter will take majority control of Laos’ energy grid system, Reuters reported. The deal comes as the country has begun struggling with debt repayments to its main international creditors, namely China, and has even maneuvered itself on the brink of a sovereign debt default. The power grid shareholding deal was signed on September 1 between state-owned Ėlectricité du Laos (EdL) and China Southern Power Grid Co, according...

Laos is referred to as the “battery of Southeast Asia” due to its many hydropower plants exporting electricity

The government of Laos has signed a deal with a Chinese company under which the latter will take majority control of Laos’ energy grid system, Reuters reported.

The deal comes as the country has begun struggling with debt repayments to its main international creditors, namely China, and has even maneuvered itself on the brink of a sovereign debt default.

The power grid shareholding deal was signed on September 1 between state-owned Ėlectricité du Laos (EdL) and China Southern Power Grid Co, according to Chinese state news agency Xinhua. Insiders said that the agreement would give the Chinese majority control of a newly founded operative company called Ėlectricité du Laos Transmission Company Limited.

The ownership of the grid is crucial as power exports are a main driver for the development plans of Laos, which is often referred to as the “battery of Southeast Asia” due to its many hydropower facilities.

EdL, which carries a debt burden of around $8 billion, would get better bargaining power with regional countries because of the Chinese majority ownership and potentially start making a profit, the insiders said.

Planned investments of $2 billion

The new company will operate under Lao government regulation, Xinhua reported, but would take advantage of China Southern Power Grid’s “financial strength and mature experiences in power grid construction, operation and management.”

According to Vientiane Times, the Chinese would invest about $2 billion in the local grid in Laos and international connections.

Overall, total Chinese investment in power, transport, a border economic zone and other projects in Laos already totals over $10 billion, according to Xinhua. Second comes Thailand with less than half of this amount.

A study published in 2019 by the Australia-based Lowy Institute put Laos’ debt to China at 45 per cent of GDP which could result in a strong economic and eventually political dependency, observers noted.



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Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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