WASHINGTON, D.C., June 23, 2015—The World Bank’s Board of Executive Directors today provided new financing of US$30 million for the Power Grid Improvement Project Lao PDR, which aims to improve the efficiency and reliability of the country’ s electricity distribution network.
The percentage of the Lao population with access to electricity increased significantly over the last two decades, from 15 percent in the mid-1990s to close to 90 percent in 2014. While increasing electrification has been a major success, the national power grid is increasingly facing new challenges related to the rapid increase in demand for electricity. In recent years, demand has grown by an average of 13 percent every year.
The main challenges are inefficient transmission and distribution networks. In some areas, over 20 percent of the supply is lost during distribution, which contributes to the need to import electricity in certain parts of the country. In other parts of Laos—such as large urban areas where demand can outstrip supply—electricity supply can be unreliable during peak periods.
“Laos has made great strides, including with past World Bank Group support, in bringing electricity to the vast majority of the population,” said Ulrich Zachau, Country Director of the World Bank for Southeast Asia. “The World Bank is now pleased to provide new financing for increasing the efficiency and reliability of the electricity supply. The new financing will help improve the quality of electricity services, while keeping prices at affordable rates, benefiting low-income customers.”
Specifically, this project will work with Electricité du Laos (EDL) in a single district - Xaythany district, which is about 10 kilometers north of Vientiane city center. Xaythany suffered a distribution loss of around 24 percent in 2014 (higher than the national average of 13 percent). Experience gained from improving the electricity network in this district will be used to scale up improvements to other areas in the future.
EDL is a state-owned corporation which owns and operates the country’s transmission and distribution assets, and manages electricity imports and exports. Technical and infrastructure improvements will be complemented by institutional capacity building, including upgrading the company’s financial management and billing systems.