|Why has the Lao Government prioritised development of the hydropower sector ?|
A: The Lao PDR is a poor, land-locked country faced with many development challenges [ click here to see key development statistics ] . It is heavily dependent on overseas assistance. Most of the population of around 6 million lives in the countryside and many survive on less than US$2 a day. Per capita GDP is around US$ 490. Continued economic growth is needed to alleviate poverty and achieve social development goals, but the options for achieving this are constrained by the small domestic economy and limited trade opportunities. Lao PDR, at its present stage of development, has few industries in which it enjoys a comparative advantage in the region, although mineral resources development and tourism have become increasingly important in recent years.
It is widely recognised that the mountainous geography of Laos, and its abundance of rivers, means the country has significant hydropower potential, which is greatly underdeveloped. Hydropower is the most abundant and cost-effective energy source with a theoretical hydroelectric potential of about 26,500 MW excluding mainstream Mekong. Of this, about 18,000 MW is technically exploitable, with 12,500 MW found in the major Mekong sub-basins and the remainder in minor Mekong or non-Mekong basins.
The hydropower sector has the potential to play a pivotal role in achieving the social and economic development objectives of the Lao Government by expanding the availability of low cost, reliable electricity within the country and earning revenue from export sales to the region. The Government’s power sector policy facilitates these objectives by encouraging optimal use of the country's natural resources, promoting efficiency in power sector institutions and creating a conducive environment for responsible infrastructure investment, both public and private.
Hydropower revenues will reduce the present unsustainable reliance on revenues from logging and exploitation of other forest products and will be a major contributor to the Government's National Growth and Poverty Eradication Strategy.
Expanded revenues from hydropower projects can be employed on expansion of health, education and other social services; improvements in transport, communications, water supply, electrification and other infrastructure; and increasing the resources of the Lao Government’s environmental agencies to improve the effectiveness of their protection programmes.
Broad improvements in the national economy resulting from stronger national accounts will generate employment opportunities and create wealth. Within depressed rural areas this will reduce dependency on "slash and burn" cultivation, poaching, excessive fishing and other unsustainable practices.
Direct investment by developers in project areas will boost local economies and create employment during construction. A more lasting legacy will be improved local infrastructure and upgraded workforce skills.
The expansion of the country's transmission system will widen the availability of cheap and reliable electricity, stimulating industrialisation in rural areas and improving the quality of life of the populations affected
Revenues from hydropower will increase GDP and will play a central role in funding the national development framework, detailed in the National Growth and Poverty Eradication Strategy (NGPES) [ click here for more information on the government’s poverty alleviation strategy].