Vientiane Times, May 17, 2014
International Finance Corporation (IFC), a private division of the World Bank Group, has expressed interest in financing hydropower plants in Laos after learning of the huge investment potential in the country, according to the senior financial institute.
At an interview in Hanoi on Wednesday, IFC Regional Manager Mr Simon Andrews told Vientiane Times that the institute planned to finance hydropower plants in Laos after seeing the potential for Laos to become a major electricity generator in the region.
“Laos has huge hydropower potential and many people have said it will become the Asean battery and supply energy to other countries,” he said.
According to a report from the Lao Ministry of Energy and Mines, Laos has the potential to build more than a hundred dams with a combined capacity of around 30,000 MW. This amount of energy could secure power supply to Thailand during peak demands.
Currently, there are more than 20 dams operating in Laos with a combined capacity of 3,000 MW.
Mr Andrew said he was unable to disclose the name of the projects and the amount of funding they hoped to invest. However, he did confirm that the bank was currently undertaking a study into the investment project.
He said what IFC hoped to focus on was helping the Lao government to increase capacity and secure the sustainable development of hydropower plants in Laos.
The environmentally friendly dams would secure the profitable return of the huge investment projects, he said.
IFC signed an agreement with the Ministry of Finance in 2013 to provide financial support to the Lao government in revising the water resource law and helping capacity building of the sector concerned in order to manage water use and secure sustainable hydropower plants in Laos.
Mr Andrew said construction of dams was associated with a negative impact to the environment and the local community therefore there was a need for developers of projects involving dams to find concrete measures to address its impact.
World Bank is one of the international financial institutes which backed the development of the Nam Theun 2 hydropower project in Laos in the hope that the investment project would generate revenue for poverty reduction.
The support of the World Bank for this major project has created more confidence in foreign investors to get involved in hydropower projects in Laos.
IFC has become a significant loan provider in Laos. The financial institute has lent money to investment projects such as hotel construction, manufacturing plants and other trading businesses.
