The Electricity Law of 1997 aims to set standards for administration, production, transmission, distribution, and import/exports of electricity in the most effective way.
The government supports investment in electricity operation, in particular hydropower. Investments could be conducted as per the following investment models:
- Total investment by the state;
- Private investments which may involve partnerships with the state within or outside the country.
Electricity companies may take up one of the listed models of development, among others:
- Build, operate, and transfer (BOT);
- Build, operate, own, and transfer (BOOT);
- Build, transfer, and finance (BTF);
- State-run through the state owned Electricite du Laos.
Investors are obliged to submit an environmental impact evaluation, including flood risk mitigation strategies for areas below the hydropower dam.
Electricity companies engaging in production, transmission, distribution, exports, imports, or development of electricity need to apply for licensing approval from the government of Lao PDR and register according to the Business Law. Exemptions of licensing approval apply to the construction of small-scale hydropower dam with less than 2 MW generation capacity due to minor environmental impacts.