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Dec 22, 2015

Recent updates from Lao PDR

By Anna Linden

-National Assembly Session –

On Monday, December 7, 2015, the 10th session of the National Assembly was opened in Vientiane. It will last until December, 25.

During this current session National Assembly members will debate and approve one constitutional amendment and eleven (11) laws. Four of the laws are entirely new laws and they are related to assemblies in the provinces, anti-trafficking, national defense and civil servants/state employees. The draft amended laws, inter alia, comprise taxation, state investment and rules on the state budget.

Whether the much anticipated review of the Investment Promotion Law from 2009 will be covered by the 10th session, remains unclear. This law governs under which conditions foreign (and domestic) investors can invest in businesses in Lao PDR.    

- Business Competition Law -

On November 24, 2015, a Business Competition Law, the first of its kind in modern Lao PDR, has been published in the Lao Official Law Gazette.  The Ministry of Industry and Commerce is the responsible agency for the legislation. It is applicable to all businesses, foreign and domestic, and defines principles, measures and regulations that prevent unfair and unjust business competition, while promoting business competition in a fair and just manner along with protecting the legitimate rights and interests of the state, business operators and customers.

- General Energy news -

Electricity rates for businesses in Laos are around 9 cents per kilowatt-hour, the lowest in the region and about 30% lower than in Japan.

On December, 9, the largest power producer in Laos, the Hongsa Mine Mouth Power Plant, which has a generating capacity of 1,878 megawatts, started its commercial operation. The project has been under construction for the past five years in the Xayaboury province. The plant is also Laos’ first thermal energy plant.  According to Thai newspapers, the Lao Government has proposed increasing the amount of power purchased under the Memorandum of Understanding to 10,000 mW, with such an agreement possibly to be signed in 2016. If approved, this would enable Thailand to boost the electricity it purchases from abroad to 14,700 mW by 2036.
A number of power stations, mostly hydropower stations along the Mekong River, are currently being planned, and about ten new large-scale power stations are set to begin operating 2015/16.

The Nam Khan 2- hydropower station, with a generation capacity of 120,000 kW, has just started operating. This project has been constructed by the Sinohydro Bureau 10 Co, Ltd. under the Power Construction Corporation of China with a total installed capacity of 130 MW and annual electrical generation of 558 GWh.

Altogether, Laos will be producing 2.4 million kW of more electricity. This will bring the country’s total power output to about 5.7 million kW by the end of the year. That amounts to 70% more than Myanmar.

Laos plans to build a further 40 power stations in the near future. This includes one at the border with Thailand to be constructed by the Japanese Kansai Electric Power. The total output capacity at that plant is estimated to be 10 million kW.

- Miscellaneous -

The Lao Government has also for the first time ever in the country’s history published a Law on Cyber Crime (publishing date: November 17, 2015).

Furthermore interesting to note in a country with vast natural resources, the Government Office has on September 18, 2015 published a Decree on the Surveying, Aerial Photography and GIS Mapping

Sciaroni & Associates Laos 

Since economic integration with ASEAN and the WTO, Laos has seen its economy grow steadily over the last ten years; with the expected GDP growth 7, 0 % in 2015 and 7, 2 % in 2016. Most of the foreign investments are in mining and hydropower, with large sectors of the economy still underdeveloped. The Lao government has been pushing for diversification of its economy, thus offering unique business opportunities for investors. Strategically located, this landlocked country shares borders with five others—Cambodia, Vietnam, Thailand, Myanmar and China—making business expansion in the region very convenient. Sciaroni & Associates, with its many years of local experience and keen insight into the particular cultures and societies, is well‐placed to assist investors in maximizing their growth potential in the region.
Sciaroni & Associates is a leading professional services and investment advisory firm that has been doing business in Southeast Asia since 1993.  Based in   Cambodia with legal offices in  Laos and Myanmar, we provide knowledgeable business insights and experienced guidance to many of the world’s leading companies, financial institutions, governments and international organizations to help maximize the value of their investments.

For more information please visit www.sa-asia.com or contact us at info@sa-asia.com.

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Sciaroni & Associates is a leading professional and investment advisory firm doing business in Southeast Asia since 1993. Based in Cambodia with legal offices in Laos and Myanmar, we provide experienced advice and business insights to many of the world’s leading companies, governments, economic think tanks, global development funds, international NGOs and the Royal Government of Cambodia in accordance with strict international standards.
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