Energy Sector in the Lao People's Democratic Republic | Asian Development Bank

Energy Sector in the Lao People's Democratic Republic

Evaluation Document | 31 October 2010

This sector assistance program evaluation assesses the performance of ADB assistance to the Lao PDR energy sector and makes recommendations for improving current and future operations.

ADB has made a substantial contribution towards creating energy infrastructure in the Lao People's Democratic Republic. In line with government policies, and in conjunction with other development partners, ADB's energy sector assistance since the late-1980s has focused on hydropower projects, grid extension, rural electrification, and capacity building. Total ADB energy sector assistance to the country between 1988 and 2009 was around $290 million for loan projects and $13.9 million for technical assistance projects.

This sector assistance evaluation study covers 2000-2009, when ADB approved support for two energy sector projects: the Nam Theun 2 Hydropower Project and the Northern Area Rural Power Distribution Project. Seventy percent of loans and over half of technical assistance approvals were linked to Nam Theun 2. The overall rating for ADB's support is successful.

Among the key lessons drawn from ADB's interventions in the country's energy sector during the review period are that one-off and standalone interventions are ineffective for capacity building related to environmental and social mitigation; and that allowances must be made for unforeseen environmental and social impacts.

On ADB's sector assistance in the coming years, the study says capacity development interventions need to increase electricity access, improve the efficiency of the country's power utility, and better manage the development of large hydropower projects in coordination with other development partners. It recommends a policy dialogue to accelerate moves toward the formulation of a comprehensive energy policy and power systems integration across the Greater Mekong Subregion.