The draft amendment to the Electricity Law being circulated in the Lao PDR provides for a new National Electric Power Development Plan (“NEPDP”) (under Art. 10) to be developed as part of the Five Year National Socio-Economic Development Plan. The formulation of the NEPDP is directed to take into account “alternative, low-cost sources of electric energy” (Art. 11). Alternative energy is defined to include “solar energy, wind turbines, biomass energy, organic energy, gas, geothermal energy, and waste [energy]” (Art. 77).
Through the draft amendment, the government is actively promoting “new clean” alternative energy (Art. 78). The Ministry of Energy and Mines will be granted the responsibility for developing alternative energy sources. As the scope of this designated authority remains vague, it is uncertain whether the Ministry will have the power to implement measures to specifically promote investment in alternative energy sources, including tariff subsidies.
While the terms of the amendments to the Electricity Law are not final, it appears from the draft that the government seeks to strengthen attention to renewable energy and acknowledge that the potential new opportunities for investment in the sector are significant.
DFDL will keep you updated as the amendment to the Electricity Law is finalized in the coming months.
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