The Achievement of 5 years Plan (2006-2010) Implementation and 5 years plan (2011-2015)

of MEM

Presented by: Mr. Chaleurn INTHAVYDeputy Director of MEM Office

Vientiane Capital, date 15 July 2010

The Presentation consists of 3 parts

Part I: Energy and Mining Development in the previous 5 years(2006-2010)

Part II: Energy and Mining Development Plan in the next 5 years(2011-2015)

Part III: Implementation Measurement

Part I: Energy and Mining Development in the previous 5 years(2006-2010)

• The rate of growth within 5 years is increased with the average 20.02 % per year, which includes:- Electricity increased 21.12%/year- Mining increased 19.91%`year

• In 2005 the contribution to GDP from Energy and Mining sector is 5.8%, and 12% in 2010.

1. Electricity sector

• There are 69 projects have invested in energy sector : CA 7 projects, PDA 20 projects, MOU 41 projects

• In past 5 years(2006-2010), 3 dams have finished construction, with about 124 MW (Nam Mang 3, NamTheurn 2, Xeset 2)

• Now, the total installed capacity is 1830 MW, under administration as following:

- EDL covers 394 MW (21%)- Joint Venture Company 1442 MW (78%)- Local Electricity Company 4 MW ( 1%)

1. Electricity(Cont)

• Some Small hydropower dam constructions have been accomplished for local utilization(Huay Sae dam-Oudomxay province, Nam gna dam-Phongsaly province, grant aid from Japanese government), Off-grid Projects.

• Focused on constructing the electricity network to serve domestic use and link to external (NARP, REP projects, 500kv, 230 kv,115kv,0.4kv transmission lines).

• Electricity consumption rate has reached 70% of the whole household over the country in 2010, increased from 49% in 2005.

1. Electricity Sector(Cont)• Energy Needs:

- 2005 increased 1521 million KWH (309 MW)- 2010 increased 2570 million KWH (499 MW)- 2020 increased 4664 million KWH (997 MW)- consumption average increased 10-12% /year

• Constraints- Energy Source construction does not follow the planed target, some projects are delayed due to the tariff negotiation, funding sources, impact of economic regression and others.- Electricity supply is insufficient with needs, electricity consumption rate is still low, especially in rural area

2. Geology and Mining Sector• Basic initial geology mapping scale 1:1,000,000 has finished

100%, scale 1:200,000 has finished 60%• Now, there are 154 companies and 269 entrepreneurs, which

118 are foreign companies and 36 are domestic companies• Main products: gold is exported 55 tons, equals 582 million

USD, copper 272 tons calculated as 1,667 million USD (since starting until now).

• In 2009, Mining sector has put to the national obligation budget over than 100 million USD.

• The new potential products in the future are: Potassium Chloride, Bauxite, metal,…

Constraint• Development the mining source as the capital has less of

number• Mining entrepreneur management was not strictly enough,

eg., gold was precipitated.• Government has insufficient capital to develop mining sector

3. Macro Management of Lao Government• Legislation

- Finished Amended Electricity Law . Drafting Decree is in the process- Finished Amended Mineral Law. Drafting Decree is in the process- Decree on Off-grid Trust Fund- Provision on Electrical Technique Standard- Provision Chemical Substances Management- Regulation on Mining Investment

• Macro Management of the government- Decentralized management - Improve Electricity Sector ( EDL and Electricity Construction and Installation State Company )- Others

Part 2: Electricity and Mining Development Plan (2011-2015)• Energy and Mining Development plan should relate

with the delivered National Social–Economics Development Plan

• Emphasizing to cross over the least development country, national economic growth continuously, people living condition is getting better

• Energy and Mining Development Strategy “Develop into Industrialization and modernization”

Development Trend• Energy and Mining Development should

prolong and relate to national social-economics growth. 5 years plan(2011-2015) has amended from strategy plan which authorized by the government in August 2009

• Ensuring using water resources and mineral ores effectiveness

• Boosting the cooperation and investment both domestic and exterior

• Ensuring the sector development is bonded with natural protection, ecology, economy and society

Expectation Outcome 2011-2015• In 2015, the contribution of Energy and Mining sector

to GDP will cover 25% • Sector Growth average 12% per year, which includes:

- Electricity sector 30%/year- Mining sector 9%/year- 80% of all households across the country could access to electricity- Emphasizing to accomplish the 7 hydroelectric power dams construction, equals to 3436 MW

Electricity

Increase Electricity Generation

from 2011 to 2015

Sepon 3 (75 MW), Nam Sim(8 MW), Nam Lik1/2 (100

MW, Nam Ngum 5 (120 MW) and other projects

Items Unit 2003 2005 2010 20152020Energy Consumption (GWh)1,102 1,521 2,570 3,504 4,664Increase rate (%) 17 11 66Maximum Need (MW) 231.3 309.2 488.9 666.6 887.3 Increase rate (%) 16 10 66Load Factor (%) 54.4 56.2 60.0 60.0 60.0

Table 2.2Œ-1: Summary of expectation of electricity needs across the country

Extension of transmission line for domestic usage

In 2010 transmission lines 115 KV

• From Luangprabang to Oudomxay, Luangnamtha

• From Paksan - –Thakhek – Savannakhet

• Hinherb -– Vanvieng , Luangprabang

• Paklai – Xayyabury, Non hai

• Savannakhet - Pakse

Electricity Development for Export

Electricity Development Strategy for Export:* Development of Electricity Generation Source for Export

* Development of Grid network Linkages to outside country

Predication of Electricity Need of the Great Mekong Sub region Members

CountryElectricity Maximum

Need(MW) Energy Need(GWH)

  2000 2005 2010 2020 2000 2005 2010 2020

Thailand 152,54 20,818 28,912 51,359 97,858 132,228 184,213328,42

9

Vietnam 4,487 7,802 11,653 28,739 24,763 44,766 68,731169,42

8

Yunnan, China 3,371 4,715 6,326 16,231 21,857 30,569 41,241 91,689

Myanmar 1,125 1,628 2,124 3,280 6,905 9,627 12,094 16,378

Lao PDR 169 368 543 887.3 871 1,839 3,503.7 4,663.8

Cambodia 150 304 477 1,156 678 1,200 1,900 5,720

• MOU with Thailand until 2020 : 7000 MW

• MOU with Vietnam until 2020: 5000 MW

Electricity Production Source for Export

Myanmar

Yunnan

LaoPDR

Vietnam

Thailand

Cambodia

Existing and PlannedHydropower

Hydropowerunder Discussion

Lignite-firedThermal Power

Natural Gas

Electricity Production Source for Export(Cont) 2011-2015

• Nam Ngum 2 (615 MW)

• Nam Ngum 3 (460 MW)

• Hongsa liknai (1800MW)

• Nam Ngiep 1 (240MW),

• Sekamane 3 (250MW),• Nam Mo (105 MW), • Sekamane 1 (468MW), • SepienSenoy(390MW), • ThernHinboun Phase2

(210 MW)• Nam Thern 3 (237 MW). ,

Grid linkage with Outside country

• Saving capital by supporting private investor to construct and

use high voltage transmission line together.

• Reduce negative impacts on environment around the grid

projects.

• Facilitate the production mangement together.

Electricity Grid 500 KV

• Nam Ngum dam to Lao-Thai border -

• Nam Thern 2 to Savannakhet (Lao -Thai border ) -

• Ban Sok/Pa Aum to Lao - Vietnam border

• Ban Sok/Pa Aum to Lao --Thai border

• Hongsa lik nai to Lao -Thai border

Geology-Mining Sector• Plan until 2015

- Focus on joint-venture investment, encourage domestic investment

- Turn into reduction of export raw materials• Expectation outcome

- Emphasizing to produce geology mapping scale 1:200,000

- building the conditions to discover and process the important mineral ores (gold, copper, potassium chloride)

- Making revenue to national budget more than 100 million USD/year• Main Activities to achieve

- Making clearly and strictly regulations

- Avoid to loss national beneficiaries

- Encouraging to invest in the model of joint-venture between domestic and foreign, particularly capital and advance technology

- Some ores will be reserved for domestic usage such as phosphorus, coal,…

Quantity of Mineral - Coal discovered quantity 370 million tons- Limestone discovered quantity 1,645 million tons- Gold ton metal 143 tons- Copper ton metal 3 million tons- Silver discovered quantity 49 tons- Potassium chloride discovered quantity 400 million

tons- Lead ton metal 6,900 tons- Aluminum ton metal 31 million tons- Gypsum discovered quantity 128 million tons- Tin-Zinc ton metal 170 million tons- Iron ton metal 6,9 million tons

Part III: Implementation Measurement• Improving organization structure, study to establish some

institutes(Discovery and survey Institute, electricity

modeling, Mining institute)

• Emphasizing to build infrastructure in order to meet with

international Standard (Roads, Railways, Electricity, water

supply...)

• Human Resources Development, upgrading working

efficiency, using advance technology (project WB, AusAID,

ADB, JP...)

• Boosting commercial linkage with international

• Monitoring and Evaluation in electrical and mineral

investments.

• Improving coordination

Thank you