Vientiane Times, June 2, 2014

International Finance Corporation (IFC), a member of the World Bank Group, is working with the Lao government and hydropower companies to improve cooperation between the public and private sectors to sustainably manage hydropower development, which has been identified as a key driver for the country’s economic growth.

Several hydropower companies participated in the latest quarterly meeting held by the Hydropower Developers’ Working Group established by IFC and the Lao National Chamber of Commerce and Industry in Vientiane last week to discuss their challenges and prioritise issues that are expected to be tabled with the government.

Those issues include taxation and royalty payments to the government, the need to improve regulations and access to financing for small hydropower projects, the availability of skilled labour, and the management of cascades.

Laos is one of the countries in Southeast Asia, which has potential to develop hydropower plants. The country has capacity to build the renewable energy network with a combined installed capacity of about 28,000 MW. At present, only 3,000 MW of the power has been developed.

“At the meeting, the hydropower companies discovered they are facing similar challenges that need to be raised with the government to improve the sustainable development of hydropower in Lao PDR,” Robert Allen, Chairman of the working group and Chief Executive of Theun Hinboun Power Co said as quoted in a press release from IFC.

“We hope to reflect the views of both small and large hydropower developers as well as suppliers and service providers.”

Following the meeting, a representative from the Tax Department of the Ministry of Finance presented the findings of a recent study on fiscal policy options for hydropower projects. He said the ministry is setting up a technical working group to discuss potential new options for fiscal management and revenue sharing of such projects.

“We are encouraged by the active participation of hydropower developers in the Hydropower Developers’ Working Group and we’re confident the working group will become an important and effective platform for dialogue between industry players and the government,” Simon Andrews, IFC Regional Manager for Cambodia, Laos, Myanmar, Thailand, and Vietnam said.

“Working together and maintaining a broad-based stakeholder dialogue will be important for the sustainable development of Lao PDR’s hydropower resources.”

Since 2011 IFC has been working in Laos to improve environmental and social standards for the hydropower sector through working with financial institutions, government agencies and hydropower companies.

The Hydropower Developers’ Working Group is an initiative of IFC’s Environmental and Social Advisory Services in Lao PDR and is funded by the Australian Department of Foreign Affairs and Trade and the Japanese government.