Businesses in Vietnam are seeing a return on their investment in Laos via a number of successful projects, which is encouraging more investment and strengthening economic ties between the two nations.

The results of financial initiatives

By the end of April 2023, following an inauguration ceremony, Hoang Anh Gia Lai International Agriculture Joint Stock Company will deliver the Nong-khang Airport Project to the Lao Government. Hua-phan province's first airport is Nong-kang. This project aims to strengthen trade in goods, develop the province's economy and society, and deepen the solidarity between Vietnam and Laos. The governments of the two countries are paying special attention to it, creating conditions and quickly removing obstacles to speed up its implementation.

Furthermore, in early May 2023, the first dairy products will be sent to Vietnam from Vinamilk's dairy and beef cow agricultural complex in Xieng-khoang. Vinamilk, a joint stock company in Vietnam, has been funding Lao-Jagro Xieng-khoang Development Company Limited's operations since 2019. This dairy and beef cow farming complex is poised for rapid success, capitalizing on Laos's fertile terrain and integrating cutting-edge processing equipment from Japan with Vietnam's extensive history in the dairy industry.

With a land fund of 15,000–20,000 hectares and a scale of 100,000 cows, the project is anticipated to have a total investment of 500 million USD. The first phase, which includes 24,000 cows, is up and running with an initial investment capital of 120 million USD, with an additional 30 million USD anticipated. Lao-Jagro Xieng-khoang Development Company Limited's head said, "Despite many difficulties during the COVID-19 pandemic, the company continues to try to carry out investment and construction work on the project as stated in the registered investment."

Check out Lao-Jagro Xieng-khoang, a huge plot of land that has been sitting idle for a long time but which Vinamilk, Vietnam's leading milk producer, has worked tirelessly to turn into lush, ecologically sound meadows. A perfect environment for eight thousand cows that provide high-quality milk that is pasteurized and kept on-site.

By hiring 238 out of 269 local workers, the initiative also helps with job creation, income improvement, and people's lives overall. The officials of Lao-Jagro Xieng-khoang Company are of the belief that: "The number of employees will be increased, meeting the company's development needs in each stage, and we will prioritize the use of local labor."

Not only are the aforementioned two projects exceptional, but other initiatives undertaken by Vietnamese companies in Laos are also showing signs of progress and will undoubtedly have a significant impact on the growth of their respective communities. Among the 79 Vietnamese territories and nations that have invested overseas, Laos ranks first with 239 projects, which is the same as 5.36 billion USD in registered capital. When it comes to foreign investment money in Laos, Vietnam ranks third, after China and Thailand.

Year after year, Vietnam's investment capital in Laos has grown in size. Vietnam sent 118.3 million USD in investment capital to Laos in 2021, a 33% increase from 2020. This figure will soar to more than 180 million USD in 2022, a significant 52% rise from the previous year. Among them, when some initiatives have positive financial outcomes, they are funded for further growth.

Resolve issues and boost investment between the nations as soon as possible.

"For many projects, relevant agencies of the two countries have focused on removing difficulties and obstacles and creating favorable conditions to accelerate implementation progress. Such projects include the Xecaman 3 hydropower project, the Alumina mineral exploitation and processing project of Viet Phuong Group, the Agricultural project of Truong Hai Group, and a number of others," according to Mr. Nguyen Chi Dung, Minister of Planning and Investment, who chaired the 45th Session of the Intergovernmental Committee on Bilateral Cooperation between Vietnam and Laos. The meeting took place in early 2023.

The Xecaman 3 and Xecaman 1 hydropower projects were surprisingly resurrected thanks to the efforts of investors and the two governments, which pushed for the elimination of obstacles and accelerated the process of project development. 

Statistics show that 2.7 billion USD has already been distributed to Vietnamese firms operating in Laos. Businesses save money, the Lao government gets more money, individuals obtain employment, and the local economy and society improve thanks to these initiatives.

However, there are a lot of issues and concerns that still require fixing with the Xecaman Hydropower Project. Hoang Minh Thuan, Deputy General Director of VietLao Power, said, "Up to now, we have not been able to remove problems with the electricity price mechanism."

According to the terms of the 2006 contract, Vietnam is now paying 4.5 US cents per kWh for the energy that the Xecaman 3 Hydropower Project produces. There is also a price slippage of 2.25%. According to the Prime Minister's official document No. 241/TTg-QHQT, VietLao Power has repeatedly asked the Vietnamese government and relevant organizations to alter this pricing so it aligns with the ceiling price for importing energy from Laos to Vietnam. The Laos-Vietnam Cooperation Committee and the Laos Ministry of Energy and Mines have likewise put out this suggestion.

Also, to help attract investors and facilitate the development of Hydropower Xecaman 4 and other upcoming hydroelectric projects, we have provided the Vietnamese government with the principles and pricing framework for Laotian electricity imports to Vietnam beginning January 1, 2026.

During the 45th meeting of the Intergovernmental Committee on bilateral cooperation between Vietnam and Laos, Prime Minister Pham Minh Chinh gave the Ministry of Industry and Trade the explicit order to expedite the resolution of this matter. Nevertheless, the authorities have yet to provide a response about the matter.

Similar issues are causing a delay in Vinamilk's project execution since the land area for the project is still not entirely transferred. Furthermore, there are a number of challenges associated with shipping fresh milk from Laos to Vietnam. “In Laos, Lao-Jagro Xieng-khoang Company is the first company to have a commercial dairy farm for export,” stated the leader of Lao-Jagro Xieng-khoang. Fresh milk is a very unique item, and the export processes, laws, and paperwork in Laos aren't up to snuff for it.

After the 45th session of the Intergovernmental Committee on Bilateral Cooperation between Vietnam and Laos, the two countries came to an agreement on working together to overcome challenges and promote large-scale projects. For example, Se-kong province's mineral exploitation and processing project and Xieng-khoang province's cow farming and milk processing complex are examples of such projects. Vietnam will also actively support Laos' newly licensed projects to ensure a smooth start to construction for projects like Cavico's mining in Bolikahamxay province and the Economic Cooperation Corporation's iron mineral exploitation project, among others.

A swift and effective resolution of challenging issues will pave the way for project activities and implementation, which will have a significant impact on Laos's socioeconomic development and strengthen the friendship and investment cooperation between Vietnam and Laos./.