New Laos Windfarm to be Biggest in SE Asia and First Ever Major Cross-Border Electricity Project

ON 09/26/2021 AT 07:40 PM

Japan-based Mitsubishi Corporation announced it will be a major backer for a new 600 MW wind power facility to be constructed in southern Laos. It will be the biggest such project ever brought online within the Association of Southeast Asian Nations (ASEAN) countries.

Largest wind farm in ASEAN region to begin construction in Laos

Artist's rendering of what the new 600 MW Laos wind farm may look like. Photo: ASEAN Press Center

The project, to be installed in Laos’ Sekong and Attapeu provinces, is unusual in that it will be the “first cross-border electricity interchange from wind power generation” in the region.

Though built in Laos, its principal customer for the electricity to be generated by the wind farm is Vietnam.

According to the developers, the new project will have the dual benefits of helping economic growth through its construction and operation, and by helping minimize carbon emissions in power generation by using a clean renewable energy source to support it.

The project will come at a critical time for Vietnam. At the same time as its economic expansion is growing rapidly, increased drought as a result of global heating has caused its own hydroelectric power plants to produce far less electricity than in the past. While the country had considered other options, securing energy from a wind farm based in Laos, its Southeast Asian neighbor, was considered the most economical to keep the country’s future growth on track.

The project will be financed in a significant way by Mitsubishi and developed by Hong Kong-based Impact Energy Asia Development Ltd. (IEAD). Construction will begin in 2022 and the plant is expected to begin supplying power by 2025.

While how big Mitsubishi’s total investment will be in the project, the company did say its Hong Kong subsidiary has approximately a 24% share in the new project. The remaining 75%+ will be held by BCPG Public Company Ltd. and Earth Power Investment Ltd. Each of these companies are subsidiaries of Thailand-based enterprises.

A key to the deal being constructed in this way was a previous announcement by BCPG that the wind farm company’s developer, IEAD, had signed off on a long-term electricity purchase arrangement with IEAD for 25 years.

The plan is also part of an even older arrangement from 2016 signed by the governments of Vietnam and Laos. According to Mitsubishi, those agreements included a commitment by Vietnam to import an estimated 5,000 MW of electricity from Laos by 2030.

Mitsubishi’s move supports its corporate objectives to double the amount of power it generates from renewable energy sources by fiscal 2030 as compared to fiscal 2019.

“We will continue to contribute to the realization of a decarbonized society by both striving to achieve a stable supply of electricity in Vietnam and addressing the environmental challenges for a stable society,” Mitsubishi said in a press statement connected with the wind farm announcement.

IEAD Chairwoman Paradai Suebma celebrated the potentially trend-setting deal by saying the project “marks a symbolic collaboration” between Laos, Vietnam, Japan, and Thailand “to work towards the global quest of net zero-emissions.”