Working Group Raises Issues at Business Forum to Make Change in Lao PDRs Hydropower Sector
In early-December, at the 9th Lao Business Forum, the Hydropower Developers’ Working Group (HDWG) of the Lao People’s Democratic Republic presented its first statement on sector issues, part of its effort to effect sustainable change within the country’s hydropower sector.
“By attending this forum, our group hopes to demonstrate hydropower developers’ interest in making positive change in the sector,” said Robert Allen, Chair of the HDWG.
Launched in December 2013 with support from the Australian and Japanese governments, the working group has identified several key issues that could boost the Lao hydropower sector, including environmental and social contracts and policies on tariffs for small hydropower developers.
“We chose to table these two issues at the Lao Business Forum because they represent challenges a majority of our members face, especially small developers,” said Allen. “For each issue raised, we also presented constructive recommendations on ways forward.”
The working group called for resolutions on simplifying the Standard Environmental and Social Obligations, a set of agreements that are part of the Concession Agreement negotiation phase for hydropower projects, including:
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Clarifying obligations for projects with large environmental and social impacts.
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Outlining a straight-forward process for projects with minimal environmental and social impact.
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Informing developers of a project from the start, and clarifying with which international standards and obligations they will need to comply.
Attendees also discussed electricity tariffs for small hydropower projects. As the Electricity Law refers to small hydropower projects as 15 MW and below, representatives of the HDWG would like the draft Policy on Electricity Tariffs to provide a set tariff for hydropower projects for 15 MW and below as well.
As the most prominent platform to allow firms to address the government about issues hampering business growth, the forum attracted many participants from the country’s private sector.
In her welcome remarks, Sally Burningham, Country Manager of The World Bank, Lao PDR explained that the capacity of the Lao economy to create jobs still depends on the competitiveness of its firms. The Lao Business Forum is an opportunity for the private sector to address issues that will help strengthen the business environment and boost competitiveness, which is crucial to sustainable growth in the long-run.
IFC supported the creation of the Lao Business Forum in 2005. It has since led to policy improvements, including lowering the corporate income tax rate for local businesses, which helped level the playing field for domestic and foreign companies. The Lao National Chamber of Commerce and Industry has run the forum since 2010.
“We hope that all our members accepted our working group statement as a collaborative effort to improve sector development,” said Allen. “We look forward to continue working on these challenges together with the Lao National Chamber of Commerce and Industry, as well as concerned ministries.”
