PHNOM PENH (Bernama): Laos is strengthening its position as a major electricity exporter, with power generation rising sharply in the first half of 2026 as it seeks to turn its abundant hydropower resources into a strategic economic asset.
The landlocked nation generated 26.67 billion kilowatt-hours (kWh) of electricity in the first six months of this year, an increase of 8.6 per cent from the same period a year earlier, citing figures from state-owned electricity operator Electricite du Laos, reported The Laotian Times last Thursday.
The latest figures underline the growing importance of electricity to an economy that has traditionally relied heavily on sectors such as tourism and agriculture.
"In the shadow of the current Gulf crisis and the growing economic activities, the electricity sector would gain prominence in the energy basket of nations.
"Increasing investment in hydropower in Laos would further provide a strategic push to regional cross-border integration of the electricity grid,” Prof Anoop Singh, founder of the Centre for Energy Regulation, Department of Management Sciences, at the Indian Institute of Technology Kanpur, told Bernama.
He said that, apart from rising electricity demand in neighbouring countries, greater access to power for Laos’s population and expanding economic activity would drive further investment in the sector, putting Laos in a strategically advantageous position in Southeast Asia.
For Laos, expanding power generation offers not only a source of domestic electricity but also an important avenue for earning export revenue.
The state utility aims to generate 58 billion kWh of electricity by the end of the year and targets revenue of US$3.6 billion (RM15 billion).
Located along the Mekong River, Laos has significant hydropower potential to supply neighbouring economies in the Mekong sub-region.
Laos already exports electricity to China, Cambodia, Myanmar, Thailand and Vietnam, while Singapore, despite its geographical distance, has also begun procuring power from Laos.
Industrialisation, urbanisation, the growing adoption of electric vehicles and electric cooking, and rising demand from digital infrastructure are driving electricity demand across Southeast Asia. However, experts say energy infrastructure needs to be developed across the region.
"Significant investment would be required in the transmission and distribution expansion in the region, and a conducive regulatory and policy climate can help attract private and foreign investment to drive growth in the sector.
"Cross-border interconnections also provide interdependency between the (ASEAN) member states, addressing the temporal and seasonal variations in demand and supply. It's a win-win example of cross-border [cooperation],” said Anoop.
Laos faces domestic electricity reliability and transmission constraints even as it expands its role as a regional power exporter.
According to the United States International Trade Administration, Laos earned more than US$2.6 billion (RM11 billion) from electricity exports in 2024 but also spent over US$177 million (RM723 million) on electricity imports, mainly due to problems with its transmission and distribution infrastructure.
In the case of Laos, developing a more mature and reliable electricity market could help attract further foreign investment in manufacturing and other sectors, strengthening the broader economy.
-- BERNAMA
