LAOS: Oudomxay - Results

Abstract of the analysis of DRE infrastructures and electrified villages in Oudomxay Province – LAO PDR

OBJECTIVES

• obtain a clear identification of both favourable factors and barriers related to the establishment and operation of decentralized rural infrastructures,
• be able to precisely identify the villages electrified by the power grid or by decentralised operators.

MAIN RESULTS

1. Inventory of DRE projects:

2. STRENGH

• Public-private partnerships and private business operations are sustainable, cost and profit efficient.
• All existing electrification projects have proven to have enough profitability, with positive balance accounts.
• Maintenance Fund operational functioning only with the money from the payment users.
• Large market with high energy demand from villagers (high willingness to pay).
• Users always pay their contribution on time (high ability to pay).

3. WEEKNESSES

• Micro-hydropower: low level of electricity load during dry season.
• Diesel projects: expensive price of fuel; PV Solar: low power capacity, services mainly enough for lighting and battery charging.
• Difficulties in the management at district level.

4. OPPORTUNITIES

• Many households in villages that run businesses by using electricity from private diesel generators suffer from high fuel cost and frequent generator breakdowns. This is an argument for developing village hydro-systems with 24-hour electricity supply. This will also promote small-scale industries, generate more income activities and reduce poverty.
• Many streams and rivers => potentials for micro-hydropower schemes;
• Public-private partnerships share the costs and risks of projects => need to attract private entrepreneurs.
• Electricity payment mechanisms may increase access to electricity. Payment of connection fee by instalments could allow the poorest households to connect. Micro credit could be offered for entrepreneurs proposing commercial activities utilizing electricity.

5. THREATS

• Seasonal variations of the river waters levels.
• High costs for the operator in case of mini and micro hydro; Developers must pay special attention to the location of infrastructure.
• High prices for users: (i) households living in very remote areas and (ii) the poorest because of the prohibitive connection fee. These people may be excluded from electrification.

OPTIONS RECOMMENDED AND SUGGESTIONS FOR NEXT PLANNING STEPS

• Village electrification with mini-grid by micro-hydro and individual electrification by solar and picohydro should be also considered as a means to increase human security and to achieve the Millennium Development Goals towards improvement of the socio-economic livelihoods and poverty reduction.
• Most of all, it is necessary to promote the participation of the private sector. It is also necessary to encourage the public sector, namely MEM/PDEM (Ministry of Energy and Mines), to survey and plan the initial investments necessary to develop new electrification projects.
• Although electrification is not a sufficient condition to achieve village development, it is its necessary condition. Transport and telecommunication infrastructures should also be developed to achieve significant synergy effect on poverty reduction.

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