MOIT VIETNAM | Strengthening Electricity and Coal Trade Partnerships and Investment Initiatives Between Vietnam and Laos

/ News / Activities

Strengthening Electricity and Coal Trade Partnerships and Investment Initiatives Between Vietnam and Laos

21st October 2024 post by MOIT Vietnam

To implement the Agreement between the Politburos of Vietnam and Laos in September 2024 and prepare for the summary, evaluation, and direction of cooperation in 2025 at the 47th Meeting of the Vietnam-Laos Intergovernmental Committee, co-chaired by the two Prime Ministers at the beginning of 2025, Deputy Prime Minister and Minister of Foreign Affairs Bui Thanh Son proposed that both sides strengthen the implementation of the assigned tasks in electricity trading, coal trading, and enhance investment between the two countries.

During a meeting with Mr. Phosay Sayasone, the Minister of Energy and Mines of Laos, who was visiting and working in Vietnam from October 19 to 21, Deputy Prime Minister and Minister Bui Thanh Son acknowledged that the cooperation in energy and mining between Vietnam and Laos has achieved many positive results recently, with active cooperation activities continuously developing. He considered this one of the pillars of economic cooperation between the two countries in the future.

Deputy Prime Minister and Minister of Foreign Affairs Bui Thanh Son met with Mr. Phosay Sayasone, Minister of Energy and Mines of Laos.

To implement the Agreement between the Politburos of Vietnam and Laos in September 2024 and prepare for the summary, evaluation, and direction of cooperation in 2025 at the 47th Meeting of the Vietnam-Laos Intergovernmental Committee, co-chaired by the two Prime Ministers at the beginning of 2025, the Deputy Prime Minister proposed that both sides strengthen the implementation of the assigned tasks in electricity trading, coal trading, and enhance investment between the two countries.

Specifically, regarding cooperation in electricity trading, the two sides need to focus on implementing the Memorandum of Understanding on electricity trading between the two countries (signed in 2006). If by 2030, Vietnam's electricity import capacity from Laos could exceed 5,000 MW, the Deputy Prime Minister proposed that the Ministry of Industry and Trade of Vietnam, along with the Ministry of Energy and Mines of Laos, report promptly so that both governments can consider adjusting the content of the Memorandum of Cooperation for the development of hydropower projects in Laos, connecting the power systems, and electricity trading between the Government of Vietnam and the Government of Laos in accordance with the actual situation.

Additionally, according to Deputy Prime Minister Bui Thanh Son, the Minister of Energy and Mines of Laos needs to direct a comprehensive review of the electricity projects in Laos that wish to sell electricity to Vietnam from after 2025 to the end of 2030 and send a summary report to the Ministry of Industry and Trade for further study and reporting to the government. In the implementation process, if any issues arise, the Deputy Prime Minister suggested that the two ministries closely coordinate, study, and report to the government to consider issues beyond their authority.

Regarding the price of imported electricity from Laos after 2025, the government has issued a Resolution authorizing the Minister of Industry and Trade to determine the framework price for importing electricity from Laos for the period 2026-2030 based on the principles of harmonious interests, shared risks, and market mechanisms. The Minister of Industry and Trade has established the framework price for importing electricity from Laos for the period after 2025 to the end of 2030 (on October 8, 2024).

However, in the spirit of discussions between Prime Minister Pham Minh Chinh and senior Lao leaders during the recent ASEAN 44th and 45th Summits, the Prime Minister has instructed the Ministry of Industry and Trade to negotiate with the Lao side to recalculate the appropriate electricity purchase price.

"Vietnam always values and prioritizes the special relationship between Vietnam and Laos," emphasized Deputy Prime Minister Bui Thanh Son.

 "Vietnam always values and prioritizes the special relationship between Vietnam and Laos," emphasized Deputy Prime Minister Bui Thanh Son.

Regarding cooperation in the coal sector, coal supply from Laos in the future will be one of the important input sources for electricity production in Vietnam. The Vietnamese government has issued a Resolution agreeing to the principle of importing coal from Laos into Vietnam, operating under market mechanisms, market prices, and legal regulations. Based on this, the Deputy Prime Minister proposed that the Ministry of Industry and Trade and the Ministry of Energy and Mines of Laos promote research on the construction, negotiation, and strive to sign a trade cooperation agreement on coal during the 47th Meeting of the Vietnam-Laos Intergovernmental Committee.

Additionally, the Deputy Prime Minister highly appreciated the cooperation and partnership between Vietnamese enterprises and Lao enterprises in implementing the construction of the conveyor belt between the two countries.

On the Lao side, Minister of Energy and Mines Phosay Sayasone expressed gratitude to the Vietnamese government for always paying attention to and valuing cooperation with Laos, especially as many Vietnamese enterprises have invested in the energy and mining sectors in Laos.

Notably, both sides have committed to an electricity trading capacity of 3,000 MW by 2025 and 5,000 MW by 2030. To date, Vietnam has approved the policy to import electricity from the cluster projects importing electricity from Laos with a total capacity of 2,939 MW; the total signed electricity purchase capacity has reached 2,239 MW, accounting for 74.3% of the committed capacity by 2025.

The proposal is that both sides need to continue deepening exchanges at all levels to make energy and mining strengths in cooperation between the two countries, Minister Phosay Sayasone believes that activities in this field will achieve even greater effectiveness in the future.