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Electricity Access in Lao PDR

Litthanoulok LASPHOMinistry of Energy and Mines,

Department of Energy Policy and Planning.

Seminar on Supporting Sustainable Development Goal 7, Target 7.1“By 2030 ensure universal access to affordable, reliable and modern energy services”, UNCC, CR-4, Bangkok, Thailand21 - 23 June 2016.

1. Development History of Power Sector2. Electrification investment and Development3. Key Driver of success in Lao PDR on

Electrification.

Contents

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1. Development History

q By 1975

ØOnly 3 hydropower plants with 32 MW, 240 GWh.

ØPopulation ~3 millionØOnly 5 main cities electrifedØEstimated less than 10% of

families have access to electricity

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1. Development History (Cont’)

1. Earn foreign exchange through electricity export to finance the country’s economic and social programs;

2. Increase access to electricity by grid extensions and off-grid rural electrification;

3. Maintain an affordable tariff to promote economic and social development;

4. Replace dependence on imported fuels for energy generation.

1st Power Sector Policy was formulated in 1990:

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ØProvide a source of foreign exchange to fund economicand social development and alleviate poverty;

ØMeet the commitments under intergovernmental MOUsand Agreements with Thailand, Vietnam and others;

ØExtend electrification to promote better socio-economicdevelopment and reach the government target of 70%and 90% by year 2010 and 2020 respectively;

ØIntegrate power sector and maintain its economicdevelopment as a whole with international communitiestrough its power exchange programs and foreign directinvestment.

In early 2005, the power sector played more significant and strategic role when the Govt’ laid out important targets in the NSEDP:

1. Development History (Cont’)

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1. Development History (Cont’)q Present day: Ø Population of 6.6 mil. or ~27 people/square kilometers;Ø GDP per capita US$ 1,903 (2015) and expected to grow

rate of 7.6%;Ø Electrification ratio reached 89.81% of total households

in 2015, increased 36% from 2000;Ø Per Capita Electricity Consumption of 470 kWh/a but

has been growing at an average rate of more than10% inthe last 15 years;

Ø Electricity export ~ 15% of total country’s exportrevenues; Power sector’s contribution to GDP isprojected to increase to ~16% in 2020;

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Households Electrification Ratio

Source: http://www.edl.com.la/

2.Electrification Investment and Development

§ Public Investment§ Private Sector Investment based on

Build Financing and Transfer§ Community Partnership and others§ Mini Grid

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Power to the Poor (P2P) programAddressing the equity and gender dimension of rural electrification

• A program designed to support the poorest households with a gender focus, to bring the benefits of access to electricity to the poor

Instrument• Interest-free credit to

qualifying households for payment of the upfront connection changes on installment plan basis

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Grid Model

Power to the Poor (P2P) programInstrument

Funds from

EdL, IDA, GEF, AusAID

EdL P2P Revolving Fund

EdL Operational Account

Contractors for house wiring

Monthly billP2P RepaymentElectricity

tariff

Address the affordability of the upfront connection charges , with a sustainable Revolving Fund

Poor Households

K700k

Kip 700,000 ~90$

Kip20,000/month~2.5 $

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Targeting the poor Initial results and looking forward

Pilot program results (2008-2009)§ 537 households in 20 pilot villages

connected utilizing P2P credit§ Average connection rate increased

from 65% to 95% in the pilot villages§ Connection rate among female-

headed HH increased from 63% to90%

Example: PHONSAAD Village:electrified in 2002, 63 out of the 270households not connected by 2008, andall the 63 households were connected tothe grid in Feb-Mar 2009 with the P2PProgram scale up country-widestarted March/April 2010 11

Provinciallevel

Village level

GOL

WB/IDA/GEF

Centrallevel

Ministry of Energy and Mines (MEM) /Institute of Renewable Energy Promotion (IREP)

Customers (Rural Community Households, Enterprises)

IDA/GEF/AusAid

Special Ac count

Electricity from SHS / VHGS Electricity

Contract

Contract

(Village Energy Advisory Committee)

REF

VOPS

PDEM

VEAC

PESCOs

VEM

Rural Electrification Division (RED) / PMUFund Manager

Technical Service & Collecting Tariff

Tariff

Cluster Plan Installation

(Village Energy Manager)

Implementation and Management Model for Off-Grid

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Institutional Structure (REF Secretariat)

Advisory Committee

Fund Manager

Secretariat Office

ConsultantIREP

Permanent Staff

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REF Source GOL established the REF in order to support (provideGrant Aid or Soft Loan) all activities to promote ruralelectrification developments. The rural electrificationdevelopment fund could come from:§ Government budget;§ Co-finance by the Government and Villagers;§ State Enterprises;§ Villagers;§ Donations from local and international agencies.

In supplementary, GOL also provides tax exception orreduce tax for import equipment, construction andoperation of rural electrification project.

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Solar Home System(SHS) for Off-Grid Villages

Solar Home System is very widely use within Lao PDR and today people are well acknowledge.

Installation: 20 – 50 Wp

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Solar photovoltaic Mini Grid

Project is Location in Phakeo Village Phoukhoun District Luangphabang Province, installed capacity 4.8 kWp

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Reverse Running pump Turbine

Micro Hydropower

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Utilization Pico hydropower in Lao PDR

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3. Key Driver of success in Lao PDR on Electrification.

1. Sustained national commitment with substantial financial support by GoL

2. Utility-driven grid-based electrification, complemented by off-grid program

3. Financial support from International donors

4. Private participation and Communities

5. Incentive for Investor and Implimentors

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• Contact:Litthanoulok LASPHO• DepartmentofEnergyPolicyand

Planning• MinistryofEnergyandMines,LaoPDR• Email:litthanoulok@yahoo.com• Visit:www.laoenergy.la