Overview
Laos’s energy sector is dominated by hydropower, which accounts for approximately 70 percent of Laos’s total electricity output. The country currently has 94 power plants, including 81 hydroelectric facilities, with a total installed capacity of more than 11,600 MW. In 2024, electricity exports brought in over $2.6 billion in revenue for Laos, yet the country had to spend more than $177 million on seasonal electricity imports due to a lack of energy grid cohesion from underinvestment in transmission and distribution. Laos currently sells electricity to six countries, Burma, Cambodia, China, Singapore, Thailand, and Vietnam. Despite energy sector challenges, including national electricity utility Electricité du Laos (EDL)’s growing debt, Laos continues to prioritize new export-focused energy generation projects, including solar and wind.
The Lao PDR government actively supports the sector by offering incentives and opportunities to foreign investors. In addition to hydropower, the country has high potential for other renewables, including solar and wind, and aims to diversify its energy mix while achieving net-zero greenhouse gas emissions by 2050. Foreign investors can access Laos’s energy sector through Build-Operate-Transfer (BOT) concession agreements. This model allows developers to finance, build, and operate hydropower facilities for a defined period before transferring ownership to the government, offering stability and reducing investment risks, according to the Lao PDR government. These agreements are often backed by government guarantees and Power Purchase Agreements (PPAs) with regional buyers, ensuring a reliable framework for foreign participation. The Ministry of Industry and Commerce oversees investment licensing and regulations. The 2024 Investment Promotion Law has streamlined approval procedures and clarified government roles, reportedly easing administrative processes for foreign investors.