In Vientiane on April 8, relevant ministers from Vietnam and Laos met to review and discuss the two countries’ energy trade agreements. Vietnam anticipates its domestic energy demand to double by 2030, and given Laos’ proximity and self-branding as the “Battery of Southeast Asia,” a bilateral energy partnership should seem the natural next step. In March, Vietnam Electricity (EVN) received proposals from seven wind farm investors in Laos to export electricity to Vietnam totaling 4,150 megawatts (MW) over time. Since then, EVN has signed 19 additional power purchase deals to import upwards of 2,600 MW sourced from 26 of Laos’ hydropower plants. Lao Prime Minister Sonexay Siphandone has expressed interest in streamlining Laos’ coal exports to Vietnam as well, but the focus lies on renewably generated electricity.
Exact pricing mechanisms have yet to be formulated, but both parties are committed to increasing their bilateral trade overall using these energy trade agreements as a catalyst. To put this into policy, the Ministers of Trade and Investment from both countries have begun a revision and amendment process for the Vietnam-Laos Border Trade Agreement to include explicit language on energy trade. This series of agreements and recent electricity purchases indicate a relationship that will serve both Laos and Vietnam’s energy priorities as a producer and a consumer respectively.
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