New Hydro Policy Puts Focus on Sustainability in Lao PDR


The World Bank Group-supported Policy on Sustainable Hydropower Development is making a difference in how Lao hydropower developers are approaching their projects and is described as a step toward strengthening the sector. Former Lao Vice Minister Viraponh Viravong, recently shared his thoughts with IFC on how the policy is being used, challenges encountered, and what makes the policy work.

“All responsible developers are very happy to see a clear definition of sustainability,” says Viravong. “The policy provides clear direction for developers to propose projects and is a very big step for Lao PDR.”

Since it was approved in January 2015, the Lao government has been rolling out the policy throughout the country, working to raise awareness and ownership among provincial-level authorities. Parallel to this, the government is also reaching out to developers to inform them on the policy through workshops and field visits. At the workshops, hydropower project representatives and others shared their experiences and challenges on issues ranging from watershed management to resettlement and compensation.

“Some project owners, especially larger developers, are keen on using this policy. We are using their cases as examples to demonstrate the benefits of this policy to other developers,” said Viravong. “In some cases, small developers are harder to sell on the policy. We are working toward raising their awareness.”

The policy is based on the principles of social, economic, and environmental sustainability. It requires improved project-data collection, planning, and stakeholder collaboration. The policy outlines the studies that hydropower projects are required to carry out, including technical and engineering aspects, environmental and social impact assessments, and progress reports on performance of policy implementation.

“It helps us and project developers to identify gaps,” says Viravong. “Tools are being developed alongside the policy that will better support the agencies, provinces and developers on aspects such as technical guidelines for hydropower feasibility studies; regulations for small hydropower development; and performance criteria for project evaluation. The policy is one piece of a larger pie that contributes to making the sector more sustainable.”

In Lao PDR, over 100 large hydropower projects were identified for monitoring. These projects were all above 15 megawatts and in various stages of development. In 2015, 15 hydropower projects in operation and 12 under construction were monitored and evaluated under the new policy.  “We will implement this policy step by step,” says Viravong.  “It takes time. We are starting to build understanding among officials and developers on how this policy can help their operations.”

With the policy now in place, Lao officials are working on improving inter-ministerial coordination and efficiency. Article 2 of the policy states that the Ministry of Energy and Mines (MEM) is the implementing ministry. However, the ministry is calling on others to work together with MEM to ensure its success.

The Department of Energy Policy and Planning (DEPP) will lead a series of technical meetings and field visits in 2017 to continue discussions on policy implementation among government agencies and key stakeholders. Working hand-in-hand with the Department of Environmental and Social Impact Assessment (DESIA), DEPP will also continue to build knowledge of the policy among officials through a series of workshops on performance monitoring of hydropower projects with respect to the policy implementation. Parallel to these efforts, DEPP has also been working closely with the Department of Forestry Resources Management (DFRM) and the Ministry of Finance and will continue to support the provinces and will also engage with other key agencies with coordination and capacity building.

“Large hydropower projects require an immense amount of ministerial coordination,” says Viravong. “Ideally the policy will help us identify ministerial responsibilities and allocate the best possible agencies to each job.” Identified as a primary hurdle for the policy, efforts are underway by MEM and its partners to develop a mechanism that improves inter-ministerial coordination.

While the policy is not exclusively geared toward large hydropower projects, the Ministry of Energy and Mines reports that large projects have found the policy most useful for their respective development stages. “At the moment, we are reviewing and assessing a number of different projects,” says Viravong. “We have plans to start talking more to developers with the policy in hand to see how it can help us solve our sustainability challenges. With a very good definition of sustainability, developers now know what government expectations are from the beginning.”