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LAOS: Electricity Charge Cut Announced in Bid to Boost Investments and Manufacturing Output

Electricity charges for commercial and residential users are set to be cut across the country. According to the Lao government, the revised tariffs will not only provide a benefit for low-income users but should also act as an incentive to boost industrial output and attract investment. The move, once implemented, will especially help high-volume users such as factories, with tariffs falling as usage rises.

Although the government has announced the new schedule of charges, it is unclear when the revised rates will come into effect. There is speculation that it may take several months to implement the measure because of the time it will take Electricite du Laos (EDL), the state-owned electricity provider, to install the related new infrastructure.

Electricity tariffs for SMEs are expected to fall from Kip 779 (US$0.08776, or HK$0.68) to Kip 761 per kWh. For factories, tariffs are expected to be reduced by 7-16%. For example, factories that consume 100,000 kWh per month will pay Kip 684 per kWh while those consuming 1m kWh per month will be charged just Kip 600 per kWh. At present, all factories are charged Kip 714 per kWh irrespective of their total monthly usage.

Content provided by Picture: HKTDC Research
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