State power utility Vietnam Electricity (EVN) will buy around 1.5 billion kWh of electricity a year from Laos in two years starting in 2021, local media reported.

Under contracts signed on January 4, EVN will buy 263 million kWh annually from Chealun Sekong Group from 2021 and 632 million kWh from the company’s two other plants from 2022.

EVN will also buy roughly 596 million kWh a year from two hydropower plants belonging to Phongsubthavy Group from 2022.

Vietnam needs to import electricity for economic growth. Photo: VNMedia

The contracts were signed at the 42nd Meeting of the Intergovernmental Committee co-chaired by Vietnamese Prime Minister Nguyen Xuan Phuc and his Laotian counterpart Thongloun Sisoulith during the Laotian PM’s visit to Hanoi on January 2-4.

Thongloun Sisoulith’s visit is aimed to triple the bilateral trade in 2020 from around US$1.2 billion in 2019.

In February 2019, Vietnam’s Ministry of Industry and Trade (MOIT) and Lao Ministry of Energy and Mines signed an agreement on developing mining and power projects during the visit to Laos by Vietnam’s State President Nguyen Phu Trong.

The import, meanwhile, aims to mitigate power shortage which is likely to occur this year.

The MOIT has said the country might fall short of 3.7 billion kWh in 2021 and nearly 10 billion kWh the following year.

The figure is likely to hit 15 billion kWh in 2023.

Vietnam has planned to buy more power from Laos and China in case of serious shortage but the import is just a standby option.

In a related development, PV Power, an electricity subsidiary of PetroVietnam, is reportedly considering joining the US$2.3 billion Luang Prabang hydropower dam on the Mekong mainstream in Laos.