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Lao People's Democratic Republic: Northern Cross-Border Power Trade and Distribution Project

Sovereign (Public) Project | 51329-002 Status: Active

The proposed transaction TA will help the government to identify all project components and prepare the investment project though completion of the project feasibility study, least-cost electrification analysis, front-end engineering design, and preparation of bid documents for the engineering, procurement and construction (EPC) contract for the transmission and distribution systems recommended.

Project Details

Project Officer
Pradeep Tharakan Southeast Asia Department Request for information
Country
  • Lao People's Democratic Republic
Sector
  • Energy
 
Project Name Northern Cross-Border Power Trade and Distribution Project
Project Number 51329-002
Country Lao People's Democratic Republic
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9426-LAO: Northern Cross-Border Power Trade and Distribution Project
Technical Assistance Special Fund US$ 800,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Equity and Mainstreaming Some gender elements
Description

The proposed transaction TA will help the government to identify all project components and prepare the investment project though completion of the project feasibility study, least-cost electrification analysis, front-end engineering design, and preparation of bid documents for the engineering, procurement and construction (EPC) contract for the transmission and distribution systems recommended.

The investment project will help address Lao PDR's need to: (i) expand access to low-cost, reliable power in rural areas and (ii) develop priority power interconnections between Lao PDR and its neighbors to increase power trade. As originally envisaged, the proposed project would support the national electric utility, EDL (the executing agency of the project) to (i) expand distribution lines and provide off-grid alternatives in the select provinces (Originally envisaged as Luang Namtha, Bokeo and Phongsaly. A change in project locations was discussed during the meeting on 30 April 2018 and confirmed during the meeting on 11 July 2018. The distribution component will now focus on Phongsaly, Huaphanh, and Xieng Khuang); (ii) provide at least 8,000 household electricity meters for newly-connected customers; and (iii) construct one or more high-voltage transmission line(s) connecting Lao PDR with regional neighbor(s). The project builds on lessons learned from the GMS Northern Power Transmission Project and previous regional transmission support by the Asian Development Bank (ADB), and it is included in the country operations business plan, 2018 -2020 and the GMS Regional Investment Framework 2022.

Project Rationale and Linkage to Country/Regional Strategy

In recent years, Lao PDR has seen tremendous growth in economic development, averaging 7.6% from 2010-2016. Poverty has been reduced from 46% in 1992/93 to 23% in 2013. The energy sector has been a major contributor to the country's development. As the _battery of Southeast Asia,_ Lao PDR's hydropower development and electricity exports have been a critical source of revenue for the country. In 2016, electricity accounted for 21% of the country's exports. At the same time, the government's effort to expand access to electricity within its borders has led to the early achievement of its target of 90% electrification by 2020. Currently, 92% of households have access to electricity through an on-grid connection, off-grid system or solar home system (SHS). The government has since reset its objective to 95% electrification by 2020.

Despite the government's achievements, challenges remain in the energy sector. EDL's fragmented transmission and distribution system does not yet cover the entire country. As a result, there is great disparity in electrification rates between urban and rural areas. For example, regional data from 2014 shows that northern provinces of Bokeo, Luang Namtha and Phongsaly had only attained a combined electrification rate of 79% of households, with Phongslay province alone achieving only 46%, while Vientiane had reached over 99%. Poverty remains high in these provinces, with an estimated 24% of households classified as poor in 2013, compared with 5.9% in Vientiane. Unconnected rural households must choose between expensive off-grid electricity (primarily diesel) or none at all. However, the government realizes that expanding access to the few remaining unconnected households via grid connection may not be economically feasible. Therefore, ADB recommends a least-cost electrification approach, whereby alternative options, such as renewable-based mini grids, battery storage, and SHS will be evaluated along with grid extension.

The lack of a unified national electricity grid also contributes to increased system losses and affects reliability of supply. The current grid capacity is insufficient to meet peak demand in urban centers or keep up with growing demand. In addition, Lao PDR's reliance on hydropower leads to seasonal imbalances: during the wet season, hydropower is abundant and EDL has excess capacity; during the dry season, EDL experiences shortages of supply and must import power. Regional power trade can solve these imbalances and support expanded access in neighboring countries, benefiting the GMS as a whole.

The government's objectives are to further reduce poverty and alleviate fiscal sensitivities. In its Eighth National Socio-Economic Development Plan (NSEDP), 2016 -2020, the government targets Lao PDR's graduation from least-developed country status by 2020 through sustainable and inclusive development. Thus, improving electrification to households in rural areas and adding to the hydropower export capacity are two critical governmental objectives.

ADB has provided extensive support to the development of the Lao PDR electricity infrastructure since 1992. The ongoing GMS Northern Power Transmission Project , nearing completion, is extending 115 kV transmission lines and distribution systems in Xaiyabuli, Phongsaly, and Vientiane provinces, and supporting an interconnection with the Electricity Generating Authority of Thailand (EGAT) Provincial Electricity Authority system.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The national utility, Electricite du Laos, provincial and district government agencies, local communities, APs/IPs will be consulted for the proposed project. They will participate in the project planning, implementation, and monitoring through various ways including (i) consultations with stakeholders (government and non-government entities) to get inputs on the project design, required permits, and mitigation measures for APs/IPs; and (ii) public consultation meetings and focus group discussions with communities and APs/IPs to get their view and suggestions on the project potential impacts and mitigation measures.
During Project Implementation
Business Opportunities
Consulting Services A consulting firm was engaged to assist in project preparation activities for a proposed Cross-Border Power Trade and Distribution Project, including completion of the project feasibility study, least-cost electrification analysis, front-end engineering design, and preparation of bid documents for the engineering, procurement and construction (EPC) contract for the transmission and distribution systems recommended. The firm is working closely with EDL, the executing agency (EA), and directly support ADB.
Responsible ADB Officer Pradeep Tharakan
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Electricite du Laos
Samsenethai Road, P.O. Box 309
Vientiane
Lao People's Democratic Republic
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 22 Nov 2017
Last Review Mission -
Last PDS Update 31 Mar 2019

TA 9426-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Nov 2017 05 Mar 2018 05 Mar 2018 31 Dec 2019 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 0.00 0.00 0.00 0.00 800,000.00 22 Nov 2017 286,540.40

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

Tender Title Type Status Posting Date Deadline
Energy Specialist Individual - Consulting Closed 14 Jun 2018 20 Jun 2018
PPTA Consulting Firm Firm - Consulting Closed 25 Oct 2017 13 Nov 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Project Preparatory Technical Assistance 9426 09 Mar 2018 Ricardo-AEA Ltd(UNITED KINGDOM) in association with ES SAFEGUARDS COMPLIANCE SERVICES PRIVATE LIMITED(INDIA) The Gemini Building, Fermi Avenue, Harwell IBC Didcot, Oxfordshire OX11 0QJ United Kingdom Electricite du Laos Consulting Services 720,000.00

Procurement Plan

None currently available.