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Vietnam sets lower prices for renewable power from Laos
Southeast Asia’s largest wind farm to start trial operations in December
Sao Da Jr 10 Oct 2024

Energy-thirsty Vietnam will buy wind power and hydropower from neighbouring Laos at prices lower than today’s levels.

Vietnam’s Ministry of Industry and Trade (MoIT) on October 9 issued a new price framework for purchasing electricity from Laos, applicable from the start of 2026 to the end of 2030.

Under the new policy, the maximum price for wind power is 6.4 US cents per kilowatt-hour, down from the current 6.95 cents. The highest rate for electricity from hydropower plants is 6.78 US cents, down from the current 6.95 cents.

Based on this new pricing, state-run utility Vietnam Electricity (EVN) will negotiate with sellers in Laos. The MoIT has also asked EVN to promptly report major price fluctuations in the imported electricity.

Under the memorandum of understanding between the governments of Vietnam and Laos signed on October 5 2016 and Vietnam’s Power Plan VIII currently in use, Vietnam will buy from Laos a minimum of 5,000 megawatts in 2030, up from 1,000MW currently being imported from “Southeast Asia’s battery”.

In March 2023, the Asian Development Bank (ADB) and Monsoon Wind Power Company Limited signed a US$692.55 million non-recourse project financing package to build a 600MW power plant in Sekong and Attapeu provinces in southern Laos to sell power to Vietnam.

Estimated to cost US$950 million, the first wind power project in Laos will be the largest wind power plant in Southeast Asia, consisting of 133 wind turbines. It also features a 22-kilometre transmission line crossing the Vietnam-Laos border.

The ADB-led financing package comprises a US$100 million A loan from ADB’s ordinary capital resources, a US$150 million syndicated B loan, US$50 million in concessional financing, US$382.55 million in parallel loans, and a US$10 million grant.

A consortium comprising firms from Thailand, Hong Kong, Laos, the Netherlands, Japan, and Singapore is also investing in the project.

Notable stakeholders include Thailand’s Impact Electrons Siam Group and BCPG Public Company Limited, Japan’s Mitsubishi Corporation, and Laos’s SMP Consultation Sole Company Limited.

According to EVN, which will buy the electricity from the project, Monsoon will begin trial operations by late December, earlier than the previous schedule of February 2025.