China will control Laos’s electricity grid for the next quarter-century according to a concession agreement the Laotian government signed with a majority Chinese-owned power company revealed this week.
The company, Électricité du Laos Transmission Company Ltd. (EDLT), formed on September 1 after Électricité du Laos and China Southern Power Grid Company signed a shareholding agreement giving China Southern a majority of shares in the new corporate entity. Laos said at the time that handing China a majority of shares in EDLT was necessary while Électricité du Laos grappled with immense debt.
“EDLT will invest U.S. $2 billion to build, manage and control the Lao power grid for a 25-year concession period. After 25 years, the business will be transferred to the Lao government,” an official of the Lao Ministry of Energy and Mines told Radio Free Asia on March 12.
“Given the current economic downturn and the enormous debt, the Lao government does not have the ability to manage and operate a network of powerlines, so they decided to allow the Chinese, who have the finances, technological aptitude, and manpower to take over,” the official explained.
“The deal is bad. … Normally in a cooperative agreement, the foreign company transfers technology or knowledge to the host. But not the Chinese,” an energy expert at the Lao Ministry of Energy and Mines told RFA on condition of anonymity.
“When they installed a powerline system in the Lao National Convention Center in Vientiane, they did not provide us with any instructions. When the electrical system breaks down … or when we want to make improvements to the building, we have to call in Chinese technicians,” he alleged.
The signing ceremony for the EDLT agreement granting China a 25-year concession to control Laos’s power grid took place in the Laotian capital of Vientiane on March 12. Sonexay Siphandone, who serves as both Laos’s Deputy Prime Minister and Minister of Planning and Investment, attended the signing along with Chinese Ambassador to Laos Jiang Zaidong and other representatives from both sides.
“[A]s a fundamental and pillar industry, electricity is a key element in building the China-Laos community with a shared future, which serves as a propeller for economic and social development,” Chinese Ambassador Jiang said after attending the event.
“By setting an example of China-Laos friendly cooperation, we could pay tribute to the 2021 China-Laos Friendship Year, and make contributions to building the China-Laos community with a shared future,” he told Xinhua, China’s official state-run press agency.