Realizing rural electrification in Southeast Asia: Lessons from Laos

The Lao People's Democratic Republic, a least developed land-locked country in Southeast Asia, was able to quadruple its electrification rate from 16% in 1995 to 63% in 2009. This has been achieved due to a series of projects undertaken by the government in conjunction with multilateral aid organizations. This study examines one such project undertaken recently by the Lao government and the World Bank called the Rural Electrification Project Phase I (REP I). Based on field research and research interviews conducted in Laos, the focus of this study is to understand this project's design and implementation, key success factors, and shortcomings. The authors derive lessons for both developing countries and those giving energy aid (such as multilateral financial institutions and development agencies) by laying out the dilemmas the project faced and emphasizing how key challenges were overcome. The study concludes by arguing that geographic and socio-economic data should be collected before electrification programs proceed, that programs must focus on the commercial viability of electricity suppliers, that fee-for-service models hold great promise, and that outsourcing can improve the efficiency and efficacy of electrification efforts.

Research Highlights
► Laos has quadrupled its electrification rate from 16% in 1995 to 63% in 2009.
► The experience with Laos shows that geographic and socio-economic data should be collected before electrification programs proceed.
► It also shows that programs must focus on the commercial viability of electricity suppliers and that fee-for-service models hold great promise.