Expected to issue price frame for purchasing electricity from Laos in early second quarter

View of the meeting. (Source: Ministry of Industry and Trade) — View of the meeting

At a recent meeting, Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Energy and Mines Phosay Sayasone discussed many issues to promote cooperation in the fields of energy and minerals between the two countries.

The talks were part of the working visit of Minister Nguyen Hong Dien to Laos to concretize high-level agreements and implement the results of the Vietnam-Laos Intergovernmental Committee Meeting in early 2024.

The Lao Minister of Energy and Mines suggested that the two sides work together to develop more specific cooperation plans and programs, and have more exemplary and effective cooperation projects and works. Minister Phosay Sayasone proposed a number of issues that the two sides need to focus on solving at present, such as: establishing a working group to promote the progress of issuing a price framework for Vietnam to buy electricity from Laos after 2025; supporting and exchanging experiences in establishing an electricity regulatory agency; promoting and facilitating the transportation of goods from Laos to border gates/ports in Quang Tri and Thua Thien-Hue; supporting cooperation in inspection work; planning and mapping of minerals, etc.

Minister Nguyen Hong Dien highly appreciated the specific proposals of Minister Phosay Sayasone, emphasizing the importance of energy and minerals for Vietnam to serve domestic production activities, responding to the rapid growth and development of the current economy.

The Minister agreed with the proposals of the Lao Minister of Energy and Mines, and also raised many important contents and solutions to promote cooperation in the energy and mineral fields between the two countries; agreed to establish a working group of the two ministries to remove difficulties in cooperation in energy and minerals.

The working group will regularly and periodically review and report to the ministry's leaders on difficulties and obstacles that need to be resolved. The ministry's leaders will also periodically have exchanges and discussions to promptly resolve and remove arising obstacles.

Minister Nguyen Hong Dien discussed many specific contents to implement the high-level commitments and agreements of the two countries, and to implement the results of the Vietnam-Laos Intergovernmental Committee Meeting in early 2024.

According to Minister Nguyen Hong Dien, the issuance of a price framework for purchasing electricity from Laos after 2025 is very necessary. At the request of the Lao side and based on the 2024 Cooperation Agreement between the two governments, the Vietnamese Ministry of Industry and Trade has directed the Vietnam Electricity Group (EVN) to study and propose a price framework for purchasing electricity after 2025 to report to the Ministry of Industry and Trade, then report to the Government for approval.

Currently, EVN has also completed research and drafted the price framework and is sending it to the EVN Board of Members for approval before reporting to the Ministry of Industry and Trade.

After receiving the official report from EVN, the Ministry of Industry and Trade will review and report to the Prime Minister for approval. It is expected that in the first quarter of this year, the price frame for purchasing electricity from Laos after 2025 will be officially issued.

Regarding Laos's request for Vietnam to provide professional support and exchange experience in establishing an electricity regulatory agency (similar to the Electricity Regulatory Authority of the Ministry of Industry and Trade), Minister Nguyen Hong Dien highly appreciated and assigned the Electricity Regulatory Authority to be the focal point, coordinate with the Lao side, share experience, provide professional support, welcome study delegations, and exchange experiences from the Lao side. In the field of inspection, the two sides need to continue to cooperate, support each other, and promote the results of the work since June 2023.

Regarding Laos' request for Vietnam to promote and facilitate the transportation of goods from Laos to border gates/ports in Quang Tri and Hue, Minister Nguyen Hong Dien affirmed that Vietnam always creates favorable conditions for the transportation of goods from Laos to Vietnam, especially through border gates and to ports in Vietnam.

In Quang Tri, there is La Lay International Border Gate - an important border gate for transporting goods, especially coal, directly serving the coal trade between Laos and Vietnam. Coal from Laos to Vietnam through La Lay border gate will go to Chan May and Thuan An ports of Thua Thien-Hue or Cua Viet port.

hoi dam bo cong thuong 2.jpeg — Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Energy and Mines Phosay Sayasone at the meeting.

The Minister emphasized that coal trading is a matter of great concern to the two governments and the two ministries. Vietnam's purchase of coal from Laos, in addition to the benefits it brings to Laos, will also contribute to ensuring Vietnam's domestic electricity supply. Therefore, facilitating the transportation of goods and coal from Laos through border gates to Vietnam and to ports is also a concern of Vietnam.

Regarding coal trading cooperation, Minister Nguyen Hong Dien said that Vietnam's demand for coal imports is very high and boosting coal exports is also the desire of Laos, but the most important thing is to focus on solving the problem of reasonable coal prices. The two sides need to find solutions to reduce the cost of selling coal from Laos to Vietnam, the price of Lao coal must be at least equal to the world price to be competitive.

Minister Nguyen Hong Dien suggested that Lao coal mine owners restructure their production processes to be lean and efficient, invest in a conveyor system to transport coal across the border to reduce the cost of mining, production and transportation of coal; the Lao Ministry of Energy and Mines consider reporting to the Lao Government to abolish the coal export tax (10%). This tax was issued to generate revenue for the Government, but in reality, it will increase the selling price of Lao coal, leading to unsold coal and thus the Government and businesses will have no source of revenue.

The Vietnamese Minister of Industry and Trade also requested the Lao Ministry of Energy and Mines to report to the Lao Government to invest in upgrading and expanding existing routes from Calum to La Lay and from Calum to Lao Bao to improve transportation capacity compared to present.

Domestically, the Vietnamese Ministry of Industry and Trade has also directed units to implement specific tasks and solutions, including encouraging businesses to prioritize signing contracts/commitments to purchase and sell Lao coal to serve domestic electricity production.

TB (according to VNA)

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