Vietnam, Laos boost energy cooperation

Over the past 60 years, the unity, friendship and special cooperation between Vietnam and Laos have continuously been reinforced and developed, and achieved significant historical accomplishments in the socioeconomic and diplomatic fields. This has helped foster a strong and expansive cooperative relationship between the two countries across various sectors.

Signing a Memorandum of Understanding on the cooperation plan between Vietnamese Ministry of Industry and Trade and Lao Ministry of Industry and Commerce in 2022

The two governments have acknowledged there is still untapped potential for mutually beneficial cooperation in the field of electricity. With a large population, stable economic growth and high electricity demand, Vietnam is striving to ensure sufficient energy supply to support its socioeconomic development while transitioning towards green, clean and sustainable energy in line with its commitment to achieving net-zero emissions by 2050. Meanwhile, Laos possesses significant energy potential, particularly in hydropower. However, Laos has low electricity consumption compared to its potential. Therefore, energy cooperation between Vietnam and Laos is driven by the practical needs of both countries.

To enhance the bilateral energy cooperation, especially electricity one, the Ministry of Industry and Trade of Vietnam has organized a series of working sessions and exchanges with Laotian partners, following the guidance of the two countries’ Prime Ministers. These efforts aim to strengthen collaborative implementation of and investment in various energy projects, including the Memorandum of Understanding between the Vietnamese and Laotian governments on the development of hydropower projects, power grid interconnection, and electricity imports from Laos. Additionally, efforts are being made to boost electricity trading and support the development of hydropower projects in Laos.

The Minister of Industry and Trade of Vietnam and the Minister of Energy and Mines of Laos signed a Memorandum of Understanding on cooperation in the coal sector in July 2023

Since 2022, Vietnamese Minister of Industry and Trade Nguyen Hong Dien has had multiple direct working sessions with the Minister of Energy and Mines of Laos regarding bilateral energy cooperation.

During the Laotian Prime Minister’s official visit to Vietnam from January 8-10, 2022, Minister Nguyen Hong Dien conducted important activities with Laotian Ministers, including signing a Memorandum of Understanding on a 2022 cooperation plan between the Vietnamese Ministry of Industry and Trade and the Lao Ministry of Industry and Commerce. He also held talks with Minister of Industry and Commerce and Minister of Energy and Mines of Laos. In the meeting with the Minister of Energy and Mines of Laos, Minister Nguyen Hong Dien expressed confidence that the energy sector would become a spearhead industry, making significant contributions to the budget of Laos in the future.

The two ministers reviewed the results of cooperation in electricity trading and welcomed the efforts of businesses from both countries in promoting Vietnam’s electricity imports from Laos in line with the orientations of the two governments. The two ministers also proposed solutions to address difficulties and obstacles, creating favorable conditions for the business communities of both countries to cooperate in the energy sector, particularly in electricity.

On April 10, 2022, during his working visit to Laos, Minister Nguyen Hong Dien held talks with the Lao Minister of Energy and Mines to enhance bilateral cooperation between Vietnam and Laos in the fields of electricity and minerals.

In February 2023, at the headquarters of the Ministry of Industry and Trade, Minister Nguyen Hong Dien held discussions with the Lao Minister of Energy and Mines.

During the working sessions, Minister Nguyen Hong Dien emphasized the viewpoint that both countries have ample room to develop mutually beneficial cooperation in the electricity sector. He affirmed that the Vietnamese Ministry of Industry and Trade is willing to facilitate information exchange between Vietnamese corporations/businesses and Lao coal exporting corporations/businesses to meet Laos' coal export demand and Vietnam's coal import demand. This would further promote coal trading between the two countries.

The Minister of Industry and Trade of Vietnam and the Minister of Energy and Mines of Laos signed a Memorandum of Understanding on cooperation in the coal sector in July 2023

July 2023 marked a new milestone in energy cooperation between the two countries when the Vietnamese Minister of Industry and Trade and the Lao Minister of Energy and Mines signed a Memorandum of Understanding (MoU) between the two ministries on cooperation in the coal sector. The MoU contains important provisions aimed at promoting coal trade between the two countries, particularly the goal of exporting 20 million tonnes of coal from Laos to Vietnam annually, subject to market conditions and the needs of each party. It also aims to enhance investment cooperation in coal mining, processing, and export activities, as well as strengthen the sharing of experiences to improve capacity in coal mining and processing. The MoU will also facilitate coal trading between businesses of both countries.

“This is an important document with practical significance for both countries,” emphasized Minister Nguyen Hong Dien. He further affirmed that the MoU not only demonstrates the determination of the Vietnamese Ministry of Industry and Trade and the Lao Ministry of Energy and Mines to implement the directives of the high-level leadership, but also contributes to improving the cooperation framework between Vietnam and Laos, strengthening the special solidarity and friendship between the two countries, and consolidating the relationship between the Parties, States, and peoples of both nations. Additionally, it contributes to ensuring national energy security, promoting Vietnam's energy transition commitments with the international community, and creating conditions for Laos to effectively exploit and leverage its potential and advantages to accelerate socioeconomic development while ensuring national defense and security.

On December 9, 2023, Minister Nguyen Hong Dien chaired a conference to promote coal trading cooperation between Vietnam and Laos. At the event, the minister urged related agencies to speed up progress of the undergoing projects between the two countries to effectively implement the directions of the two governments on promoting cooperation in the energy sector, specifically importing electricity and coal from Laos.

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After working sessions between leaders of the MoIT of Vietnam and the Lao Ministry of Energy and Mines, the bilateral cooperation in the energy sector especially in electricity has achieved positive results and brought practical benefits to both countries. So far, Vietnam’s electricity import from Laos has basically achieved the set target in the 2021-2025 period.

Vietnam Electricity (EVN) has signed 19 power purchase contracts (PPA) with investors to buy electricity from 26 hydroelectric plants invested in Laos with a total capacity of 2.689 MW. Difficulties and obstacles that have existed for many years in a number of key projects have been promptly and completely resolved. Those results have contributed to deepening the special solidarity between the Parties, states and people of the two countries, as well as between the two related ministries.