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By Olivia Huang. First published in The Paper.
In 1985, Laos was listed as the only "least developed country" in Southeast Asia by the United Nations. Hundreds of years of wars and conflicts on this land have left a land of wreckage. The continuous occupation by Japan and France during and after World War II delayed its independence and hindered its economic development. From 1964 to 1973, Laos was bombed by more than two million tons of missiles from the US military. To this day, there are still hundreds of thousands of unexploded ordnance (UXO) scattered in the east and south of the country, which has not been excavated, posing a hidden danger to industrial development. Despite this, the people of this land are devout Buddhists, simple and kind, and hardworking. Laos and its people are moving together towards the goal of graduating from the least developed country in 2026.
The author state that since she arrived in Laos, the Chinese language that kept appearing along the way has continued to ease the loneliness of being alone in a foreign country. With the expectation of exploring what kind of contribution China has made to the local economic development in Laos, she visited the Laos Representative Office of PowerChina and heard many stories about how PowerChina supports the local economic development in many ways and always provides timely assistance in times of crisis.
In 29 years, 1/3 of Laos’ domestic power grid electricity
Laos has abundant water resources, and its government estimates that the country's water conservancy development potential is 26GW. However, due to the lack of planning and construction capabilities of local enterprises and the backward development level of the local area, hydropower development has not yet exceeded 50%. China Power Construction has participated in the development and planning of its hydropower industry throughout the entire industrial chain, and has participated in more than half of Laos' hydropower station projects. The total power generation accounts for about 1/3 of Laos' domestic power grid. It is the most important foreign participant in Laos' domestic power grid besides its own country.
At the end of the 20th century, China's domestic electricity market gradually became saturated. Under the strategy of "going global", the domestic power industry expanded to overseas markets with rich practical experience in the construction of projects such as the Three Gorges Dam and localized advanced foreign management experience. China Power Construction was one of the earliest. In 1996, China Power Construction entered the Lao market by building the Nam Leuk Hydropower Station. The project is located in Vientiane Province in central Laos, with a total installed capacity of 2×30,000 kilowatts. It was invested by the Asian Development Bank. This was the first overseas project independently undertaken by China Power Construction Group's subsidiary China Hydropower Bureau No. 10, and was completed on schedule in 1999.
In 2008, PowerChina invested in the Nam Ngum 5 Hydropower Project (120MW) in Laos. This was the first hydropower station invested by PowerChina in Laos. It was operated under the BOT (Build-Operate-Transfer) model, marking its transition from a simple contractor to a more comprehensive contracting model. Since the power station was put into commercial operation on December 2, 2012, it has generated more than 5 billion kWh of electricity. The project has also trained dozens of local employees, who have not only brought higher incomes to their families, but also learned new skills and languages. The "China-Laos Hydropower Terminology Quick Reference Manual" compiled by employee Ajiu has become a must-have for employees of the two countries to communicate with each other. [i]
Over the years, PowerChina has fully helped Laos unleash the potential of hydropower as an economic engine, which has strongly promoted the economic development of Laos. The most important is the Nam Ou River cascade hydropower station project, which was launched in 2012 and fully completed and put into operation in September 2021. The Nam Ou River is the largest tributary of the east bank of the Mekong River in Laos. It starts from Jiangcheng, Yunnan, China in the north, winds south and merges into the Mekong River in Luang Prabang in northern Laos. The project adopts the "one reservoir and seven levels" design scheme with a total installed capacity of 1,272 megawatts. It is the only project of PowerChina in Laos that has obtained an overall plan for the entire river basin and invested and developed in a build-operate-transfer model.
In addition to the advantage of huge power generation, the project also has the significant advantage of stable power generation due to the presence of a reservoir that can store water for power generation. More than 95% of Laos' domestic electricity is hydropower, but it has a significant seasonal characteristic. During the dry season from November to April of the following year, the high temperature and water shortage will lead to strong demand for electricity, and the country has to import electricity from abroad at high prices to meet the needs of industrial development and residential electricity consumption.
Due to the mismatch between power supply and demand and its seasonal contradictions, when many hydropower stations are unable to generate stable power due to the lack of reservoirs, the project can still sell a large amount of electricity at a relatively low price to the Electricity Company of Laos (EDL), effectively making up for the defects of Laos' power structure and making an outstanding contribution to the stability of Laos' power system. [ii] Although the Electricity Company of Laos (EDL), as the purchaser of the power from the Nam Ou River Hydropower Project, has accumulated a huge amount of unpaid electricity bills, China Power Construction "is like a fire brigade" and is responsible for the Lao people to continue to generate electricity and help Laos get through another difficult dry season.
Achieve the status of "Southeast Asian battery"
Laos is the largest exporter of electricity in ASEAN and has a surplus of electricity compared to neighboring countries. Selling electricity abroad mainly involves two agreements, namely the power purchase agreement (PPA) reached with power companies in other countries on who will purchase electricity and the concession agreement (CA) granted by the Lao government to project developers. The Lao government mainly relies on the latter to obtain development income. However, due to the lack of regulation capacity of most hydropower installed capacity, Lao hydropower generation is highly seasonal, and electricity is mainly exported in the rainy season, resulting in low bargaining power in Laos' electricity export prices.
At present, the vast majority of Laos’ hydropower installed capacity is invested, constructed and operated by independent power producers (IPPs). Thirty percent of them are invested by Laos and Chinese companies such as PowerChina, supplying electricity to Laos’ domestic power grid, while more than 70% are invested by Thailand, South Korea, Malaysia and other countries for export to neighboring countries. Most of the installed capacity for export is not integrated into Laos’ domestic power grid, but is directly connected to the power grids of neighboring countries through the installed capacity, selling electricity in the form of “point-to-grid”. Laos has reached power trading cooperation agreements with neighboring Thailand, Vietnam, Cambodia, Myanmar and China. Among them, it has reached cross-border power trade agreements with Thailand, Vietnam and Cambodia with a capacity of more than 1,000 megawatts. The success of the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) is recognized as a model of multilateral power trade (MPT), further confirming the feasibility of such projects. [iii] As ASEAN’s economy grows, its energy demand is also growing simultaneously. In order to better meet the requirements of sustainable development, ASEAN is gradually turning to rely on renewable energy for power generation. Laos’ water resources will continue to be developed during this stage and are expected to attract more investment.
PowerChina has helped Laos complete several important electricity sales and transmission projects, making outstanding contributions to Laos' goal of becoming the "Battery of Southeast Asia" and ASEAN's cross-border power transmission. The Don Sahong Hydropower Station, located in Champasak Province in southern Laos and adjacent to the border between Laos and Cambodia, is the first power project to achieve cross-border electricity sales from Laos to Cambodia, with a total installed capacity of 325 megawatts.
The first phase of the project is equipped with four 65-megawatt tubular hydropower units, which are the largest single-unit capacity bulb tubular units in Asia and the second largest in the world. Since its commissioning in 2019, the expansion has been completed as scheduled in 2024, with a utilization of nearly 8,000 hours, making it the hydropower station with the highest utilization hours in Laos and a significant economic benefit. [iv]
The success of the Nam Theun 1 Hydropower Station project is inseparable from the business advantages and dedication of China Power Construction. Located in Bolikhamxai Province in central Laos, the project is invested by Thailand and mainly supplies electricity to Thailand. It is a key component of Laos' vision of becoming the "Battery of Southeast Asia". At the end of 2019, the original contractor of the project had difficulty in advancing due to various reasons and the project schedule was seriously delayed. At this time, China Power Construction cooperated and quickly took over and started construction.
During the construction process, it overcame various unfavorable conditions such as the COVID-19 epidemic and set a world record of 361,300 cubic meters of on-site roller compacted concrete pouring per month. In August 2022, the Nam Theun 1 Hydropower Station project undertaken by China Power Construction was officially completed. The owner's letter of thanks arrived along with the handover certificate. China Power Construction has been highly recognized for its Chinese efficiency and spirit. [v]
Water, energy, city, mine
In addition to hydropower, PowerChina has gradually relied on its business capabilities and Chinese experience to participate in energy, cities, infrastructure, mining and other fields. In terms of energy development, PowerChina has participated in the construction of more than 70% of energy projects in the Lao market. As the largest power construction and investment company in Laos, it has also kept pace with the times and actively explored the development of new energy. It has helped the Lao government to compile the "National New Energy Master Plan for Laos" and applied China's rich experience in renewable energy construction to Laos, flexibly deploying the agricultural photovoltaic complementary agricultural poverty alleviation demonstration project in Salavan Province and the photovoltaic carport and charging pile integrated demonstration project in the garage of the Ministry of Energy and Mines in Vientiane.
The 600MW Monsoon wind power project under construction in southern Laos fully demonstrates the innovation, technology and strength of China Power Construction. Many international bloggers have come here to admire the project and marvel at its advanced and beautiful features. After several years of investigation and preparation, the project finally started construction in the southern part of Laos, which is rich in wind energy resources.
This international project, which was invested by Thailand, the Philippines, Japan and other countries, built in Laos, contracted by China, and finally sold to Vietnam across borders, is the first and largest single wind power project in Laos, and the first cross-border transmission new energy project in Asia. Since the official start of construction in March 2023, the project has broken through many restrictions during the construction process, such as the wet rainy season, steep terrain, complex transportation roads, strong winds and foggy seasons, etc.
Through early deployment, careful coordination, innovative application of technology and risk management, the project has completed the phased tasks on schedule and won multiple international safety awards for two consecutive years. [vi]
China Power Construction Corporation also participated in the planning and construction of infrastructure that is crucial to economic development and people's livelihood, including power stations, roads, bridges, housing construction, agricultural water conservancy and other aspects, and also invested in mining such as cement and potash. Many major cities in Laos have left behind the achievements of China Power Construction, such as the expanded Luang Prabang Provincial Hospital, the new city of Boten in the north, and the Parkson Building in the capital Vientiane.
The China–Laos Kunming–Vientiane Railway has made Laos, which originally only had a section of about 3.5 kilometers connecting to Thailand, more convenient transportation conditions. The Boten section from the Boten Port in Yunnan Province, China to the Laotian capital Vientiane is the first rail transit project participated by China Power Construction Corporation in Laos, and construction began in 2016. The completion of this section also made the journey that originally required careful driving for a day and a half to complete only four or five hours, greatly facilitating the transportation of goods and personnel. The full opening of the China-Laos Railway in December 2021 will inject vitality into the development of new industries such as finance and light industry in Laos.
In April 2023, the China-Laos Railway International Passenger Train was opened. In the past two years, a total of 1.91 million passengers have been transported, which has promoted economic, trade and cultural exchanges between China and Laos, driven the development of Laos' tourism, ecological agriculture and related industries, and transformed Laos from the only landlocked country in Southeast Asia to an important land-linked country. [vii]
Make the local area richer
When I asked how PowerChina fulfills its corporate social responsibility, in addition to basic actions such as donating money during flood disasters and personally participating in various disaster relief and rescue activities (such as car accidents and dam failures built by other contractors), PowerChina also pays special attention to sustainable development and ecology, bringing long-term benefits to the local area.
In the process of building hydropower stations and reservoirs, in addition to jobs with retention opportunities, PowerChina pays special attention to the sustainable development of the construction area during the construction process.
When building the reservoir area of the Nam Ou River project, after sincere communication with local people and reaching an immigration agreement, PowerChina flexibly used domestic experience to build an immigrant village, and at the same time built new or upgraded water supply facilities, schools, roads, Buddhist temples and other facilities and public places to fully solve the problems of local people's difficulty in getting water, unclean water, lack of connectivity, and lack of educational resources.
According to its website, "Since the preparation of the Nam Ou River Phase I project in 2011, a total of about 250 kilometers of new, renovated and expanded roads have been built for the local area, more than 10 bridges and more than 10 road culverts have been built; 8 concentrated immigrant villages and supporting facilities have been built, more than 1,100 immigrants have been relocated or resettled, nearly 10 batches of furniture have been donated, and the production and living conditions of more than 20 local natural villages have been improved." It has also improved local water use and carried out multiple livelihood restoration projects.
When constructing the Laos-China Railway, PowerChina also formulated a people-oriented construction plan based on the principle of combining permanent and temporary construction, building long-term buildings that can still meet the livelihood needs of local people after construction, leaving convenient roads, better housing, and drinking water projects and other facilities for relatively backward areas along the railway. These measures help local people live and work in peace and contentment, and provide a guarantee for economic and social development. [viii]
In the development of various projects, biodiversity and ecosystem protection are also important. The Nam Ou 5 Power Generation Company donated a total of 130 million kip (local currency) to forest protection projects and purchased 90,000 fish fry for release into the wild. During the planning of several projects in the Nam Ou River, animal habitat protection areas were set up and the national forest reserves in Laos were reasonably avoided. Several ecological protection and replanting areas were planned along the route. The Mengsong Wind Power Project under construction also paid attention to the protection of birds and multiple terrestrial species. By consulting materials, asking villagers, and conducting field surveys, it timely discovered protected species during the construction process and adjusted the plan. [ix]
In closing
On March 31, 2025, at the celebration of the 70th anniversary of the founding of the Lao People's Revolutionary Party, Lao Deputy Prime Minister Chansamone Chanyalath, on behalf of the Lao government, awarded PowerChina the "National Development Medal of the Third Class" in recognition of its outstanding contribution to promoting Lao economic development. As of March 2025, PowerChina has completed more than 100 major projects in Laos with a total investment of more than US$3 billion. It currently has more than 5,000 employees, more than 3,000 of whom are local employees. Previously, PowerChina had been awarded the National Construction Medal of the Second Class and the National Labor Medal by the Lao government. These honors witnessed PowerChina's many years of deep cultivation in Lao hydropower, energy technology, infrastructure construction, mining and other fields. [x]
Looking ahead, PowerChina plans to not only promote the development of environmental and climate technologies, clean energy construction, and biomass power plants in Laos, but also consider promoting economic development through digital technologies such as smart city construction. At first glance, these words may be very different from the impression of Laos, an agricultural country and an underdeveloped country, but time may witness how they can help Laos achieve economic development and overtake others, relying on advantages such as "Southeast Asian battery" to get out of the ranks of underdeveloped countries.
Chinese efficiency: Chinese capital + Chinese technology
From November 2024 to March 2025, I interned in Abidjan, the economic capital of Côte d’Ivoire, during which time I visited the headquarters of PowerChina in Central and West Africa. When I asked why PowerChina finally pushed for the construction of the Soubré Hydropower Station, Deng Yue, Deputy Country Representative of PowerChina in Côte d’Ivoire, gave the answer that it was Chinese capital plus Chinese technology.
PowerChina signed a business contract with the government of Côte d’Ivoire in 2009 and completed the negotiation and signing of all contract documents in 2012. In the same year, Ivorian President Alassane Ouattara was invited to visit China and “proposed to seek financing for the Soubré Hydropower Station project in addition to the Western Railway and Grand Bassam Highway projects.”[Note 4] In early 2013, on the occasion of the 30th anniversary of the establishment of diplomatic relations between China and Côte d’Ivoire, then Chinese Ambassador to Côte d’Ivoire Zhang Guoqing and then Prime Minister of Côte d’Ivoire Don Kan signed a loan agreement for the project.
According to the project contract and loan agreement, the contract value of the Soubré Hydropower Station is approximately US$572 million. The Export-Import Bank of China provides a preferential buyer's credit of 85% of the contract value, with an interest rate of 2% and a term of 20 years. The remaining 15% is raised by the Ivorian government. The construction period is 56.5 months. China Power Construction Corporation is the contractor in the EPC mode, and the owner engineer is the French Tractebel-Engie Company (formerly the aforementioned Coyne and Bellier Company).
The so-called EPC refers to engineering procurement construction, which is the general contracting of project design, procurement, construction and commissioning services, and is fully responsible for the quality, safety, construction period and cost of the contracted project.
China Power Construction Corporation has always been the world leader in technology with its core advantage of "understanding water and electricity, good at planning and design, long construction and construction, and able to invest and operate".
It has undertaken more than 65% of the construction and more than 80% of the planning and design of large and medium-sized hydropower stations in China, and more than 50% of large and medium-sized water conservancy and hydropower construction in the world, and has rich engineering experience. [Note 5].
Subray Hydropower Station: The East Wind of the Times
In addition to funding and technology, I can also feel the importance of China Power Construction's "entry timing" from the research. At that time, Côte d'Ivoire had just emerged from the shadow of the civil war from 2002 to 2005 and the presidential election crisis in 2011, and there was a lot of work to be done. From entering in 2008 to finalizing the project contract in 2012, China Power Construction also experienced an election crisis and regime change, and then restarted negotiations and achieved success.
According to President Ouattara's speech at the inauguration ceremony of the Soubré Hydropower Station, Côte d'Ivoire "achieved an average annual GDP growth rate of about 9% from 2012 to 2016, and economic recovery has driven the rapid and stable growth of electricity demand"; as a participant in the Paris Climate Agreement, it pledged in 2015 to "reduce greenhouse gas emissions by about 28% by 2030"; "The Soubré Hydropower Station has made outstanding contributions to these two goals and will also help control the cost of electricity production." [Note 3] In 2013, China proposed the "Belt and Road" initiative, and China Power Construction and other companies took advantage of this opportunity to further "go global."
Chinese project staff described their first impression of Soubré around 2010 as follows: "When we first arrived, we could sense a sense of desolation; we checked into the hotel and ordered food, and had to wait for a long time before the owner bought ingredients and prepared the meal; when night fell, it was pitch black and there were no lights; today, many families have refrigerators and air conditioners, and there are electrical appliance stores in the local area, which was unimaginable at the time."
In 2017, the Soubré Hydropower Station was completed and put into operation ahead of schedule, with a total installed capacity of 275 megawatts and an average annual power generation of 1,190 gigawatt-hours. It "increased Côte d'Ivoire's national power generation capacity by nearly 14%, increased hydropower installed capacity by 30% to 40%, and improved the country's power structure dominated by thermal power"; "created nearly 3,000 direct jobs and 5,000 indirect jobs in four years of construction"; "electrified 13 villages around the project"; and "increased Soubré's drinking water supply from 100 cubic meters per hour to 300 cubic meters per hour." [Note 3] Overall, the ratio of hydropower to thermal power in Côte d’Ivoire is now 30:70, and the proportion of the population in electrified areas has also increased from 74% in 2011 to 97% in 2023, showing a good development trend. [Note 6]
Boboli Hydropower Station: Keep up the good work
The inauguration ceremony of the Soubré Hydropower Station was also the groundbreaking ceremony for the Gribo-Popoli Hydropower Station. As a sister project of the Soubré Hydropower Station, the Popoli Hydropower Station is also located on the Sassandra River in the city of Soubré, about 15 kilometers away from the upstream Soubré Hydropower Station. China Power Construction Corporation is also the general contractor, with preferential buyer credit provided by the Export-Import Bank of China, and the Ivorian Energy Company managing power assets on behalf of the state.
The contract amount is US$336 million, the construction period is 40 months, and it will be started in August 2021 after receiving the first loan and the owner's advance payment. It was the largest hydropower station under construction in Côte d'Ivoire.
In November 2024, Unit 3 of the Popoli Hydropower Station was successfully connected to the grid and put into commercial operation 30 days ahead of schedule, with an average annual power generation of 554 GWh, which effectively increased the proportion of clean energy in the country's power structure.
In addition, the Ivorian government has also entrusted China Power Construction Corporation with the implementation of cascade development of hydropower projects such as the Pudupuri Hydropower Station and Luga Phase 1 and Phase 2 in the Sassandra River Basin. The development of hydropower in this basin has not only improved the livelihood of the local people, but also consolidated Côte d'Ivoire's role as a hub in the West African Power Union.
The country has long exported electricity to Mali and Burkina Faso, and has a 330 kV interconnection with Ghana, a 225 kV interconnection with Liberia, Sierra Leone and Guinea, and a 330 kV interconnection line with Nigeria, Benin, Togo and Ghana, effectively alleviating the energy shortage in West Africa. [Note 6].
Electricity Challenges: Where is the Way Forward?
The goal of the Ivorian Ministry of Energy is to "change the country's energy landscape through sustainable development and regional integration, and provide clean, reliable and affordable electricity to the people of the country" [Note 6]. I rent an old residential building in the Cocody district of Abidjan, and I can still feel that the local electricity bill is expensive and the power supply is unstable.
According to the electricity bill at my residence, the local electricity price is 81.03 West African francs per kilowatt-hour, which is about 1 yuan per kilowatt-hour, nearly twice the electricity price in Shanghai. Whether I am interning or alone at home, I often experience sudden power outages, which last for three to five minutes and then automatically recover. When the power suddenly goes out, I have also heard my colleagues sigh: "Ah! This is Ivory Coast."
Soubré hydropower is not only clean, but also cheap - the cost of power generation is 20 West African francs per kilowatt-hour, while the cost of thermal power generation is 55 West African francs per kilowatt-hour - the development of hydropower will help reduce the financial burden of electricity. [Note 1] However, the French Development Agency also questioned the unstable supply of hydropower and its vulnerability to the alternation of dry and rainy seasons and climate change.
[Note 7] China Power Construction pointed out that the upstream dams will adjust the amount of water released according to electricity demand. Since the national electricity demand is higher in the dry season, the hydropower stations in this basin actually generate more electricity in the dry season than in the rainy season.
In early April 2025, Francis Aka, advisor to the Director-General of the National Electricity Regulatory Agency of Côte d'Ivoire (ANARE-CI), led a delegation to visit Soubré and held an information exchange meeting. Local residents expressed their confusion about the fact that the power supply quality was not as good as expected despite having three hydropower stations.
The complaints included public lighting failures caused by occasional power outages, inconvenience in production and life, and even the overly complicated process of purchasing electricity meters. Aka said that the country is taking measures to improve service quality, reduce the frequency of power outages, and promote the purchase of electricity meters. [Note 8] The actual load of electricity used for production and life in Côte d'Ivoire is about 2,338 megawatts.
This year, the country's total installed capacity has exceeded 3,000 megawatts, which can theoretically cover electricity demand. China Power Construction Corporation's technical staff analyzed that there are two main reasons for the current power outage in Côte d'Ivoire: "First, some hydropower stations are old and shut down for maintenance or cannot generate electricity at full capacity.
At the same time, in order to increase power supply, some gas-fired power stations are shut down for expansion, resulting in a phenomenon of power 'inversion', that is, power supply is insufficient to meet demand, forcing power supply companies to adopt a rotation mode of power supply for mining, factory production and residents' daily life; second, the modernization of the distribution system has not been completed, the failure rate of the power grid system is high, and the maintenance response speed needs to be improved."
Côte d'Ivoire is at an important stage of modernization, and the demand for electricity is constantly rising. China Power Construction Corporation will work with Côte d'Ivoire to help local economic and social development through power construction.
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