P.R. Lao Investments

Laos is a small country in South East Asia being all its landscape watered by the Mekong river and its tributaries albeit its the only one among its boundaries with enough fall to be able to produce electricity as the Mekong flows almost 2.000 Km from the China border at 1000 meters to the Cambodia one at 100 mt. Laos is currently providing electricity to Thailand, Cambodia, Vietnam, Myanmar and Malaysia.

Small and medium size HydroPower Plants market was opened to the local investors approximately ten years ago. Local building Companies got all the licenses and started to build plants, signing 28 years PPA’s with EDL (Electricitè du Lao) which is the country offtaker. ADB and World Bank (through IFC) were the main loan providers, although some foreign banks also gave credit. The situation now has change; the country is growing at a 6.9% annual rate, but international credit is scarce and ADB and IFC only provide credit to Government.

Asia Capital Energy Fund team has spent the last 1.5 years studying the LAO HPP market, meeting with the families behind the building Companies, local authorities, Institutions (IFC, ADB) and other local players and has identified a short list of plants whose owners are open to study a potential divestiture (50% to 100%). Several MOU have been already signed with this families planning to start the acquisition negotiations once ACEF is operative.

Although we have been monitoring the investment through our Bangkok site, a local team is being established in Vientiane.