New Chinese power deal sees Laos risk its future for quick gains

In early September, the Lao government signed a deal to give majority control of its electric grid over to a Chinese state-owned company amid mounting public debt as Beijing continues to expand its role in the country.

State-owned China Southern Power Grid Company signed a deal with the Lao government’s Electricite du Laos to gain majority control of a new company, Electricite du Laos Transmission Company Limited, that will manage the national electricity supply.

China is Laos’ largest source of financing and the Southeast Asian state plays a major role in Chinese President Xi Jinping’s global Belt and Road Initiative—the global infrastructure and development plan that is now a cornerstone of China’s foreign policy.

Power generation and sales are vital to the Lao government’s economic strategies as it seeks to turn Laos into “the Battery of Southeast Asia” through the construction of hydropower dams on the Mekong River and its tributaries. Around half of the country’s planned and existing dams belong to Chinese firms.

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