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Post Info TOPIC: Will Bhutan be a Laos?

Will Bhutan be a Laos?

Bhutan stands to earn millions by using its water resources to supply power to a starved India.
Is Bhutan willing to be to India what Laos has become to its neighbours, a surrogate producer of electricity? I know Bhutan and Laos don稚 have the same economic ambitions and the Himalayan kingdom isn稚 desperate to follow the yellow brick road ・it measures development differently, too ・but it has so much unused hydro-potential and India has such a great demand for electricity that the idea certainly merits a harder think.
Laos believes tapping its immense hydropower resources and being a surrogate producer for its neighbours, mainly Thailand and Viet Nam, is the surest way to earn the money it badly needs to develop its economy. Projects are partly funded by multilateral institutions and sponsored by foreign joint venture companies who build the plants and buy back the electricity in exchange for annual royalties. It痴 a sensible business deal and working well, given the rocketing demand for electricity in both Thailand and Viet Nam.
The country not only has the Mekong but also 13 tributaries that join the mighty river on its run through its territory. Rainfall never goes below 2,500 millimetres a year. Even without mainstream Mekong, the resource base is huge. Experts say Laos・capacity for waterborne electricity is no less than 23,000 MW, of which only 671 MW is currently installed.
Vientiane has been quick to spot the opportunity and has planned for at least 30 dams on the tributaries alone to take its total hydroelectric capacity to 8,700 MW by 2020. Of this, 7,700 MW would be exported under purchase agreements with neighbouring countries. The government is aware of the acute electricity shortage at home but is convinced that the answer is not to curb exports but to have more export-oriented power plants, whose residues ・unexported portions ・will, over time, build up to a volume enough to take care of home needs. Besides, China is helping build a few plants meant solely for domestic use.
The biggest of the export-oriented plants so far is the Thai-sponsored Nam Theun 2, a $1.45 billion, 1,070 MW project in eastern Laos, on course for completion by end-2009. Practically all its production ・95 per cent ・will be sold to Thailand, earning Laos almost $2 billion over 25 years. Under a power purchase agreement signed between the two countries, Thailand is expected to buy up between 3,000 MW and 5,000 MW of Laotian electricity annually.
Companies in Viet Nam are getting into the act, too. That country needs a lot of electricity to sustain its booming economy, and Laos・abundant water resources are too attractive to stay away from. Work began last month on a 250 MW plant in Laos・Sekong province, called Sekaman 3, the biggest Vietnamese-backed hydroelectric project so far, while another Vietnamese group has signed a deal to build a plant on the lower Mekong at Luang Prabang. As of now, Vietnamese groups have teamed up with Laos to build five plants with a total capacity of 3,000 MW and a combined investment of about $3 billion.
Bhutan痴 hydroelectricity potential is said to be even higher than that of Laos, almost 30,000 MW, but only about 3 per cent of it has been tapped so far by the Indian-supported, 1,020 MW Tala project. Three-fourths of the 425 MW that痴 currently produced at Tala goes to India, earning the government almost 45 per cent of its revenue.
The window of opportunity is thus quite obvious. Bhutan is in a very good position to exploit its water resource more fully to earn more income, and India needs help to assuage its gnawing hunger for electricity. Given the facts that India痴 own water resources account for only 25 per cent of its total annual power generation of 1,36,901 MW and that thermal expansion won稚 be easy any more, Bhutan is certainly a feasible alternative.
India is currently working on two more hydroelectric projects in Bhutan and it shouldn稚 be too difficult to push the idea and add a few more. However, it all depends on good neighbourliness. If neighbours can cooperate in Southeast Asia, they should be able to do so in South Asia, too. Bhutan as a 澱attery・for India makes an ideal fit. Even the states in the Indian north-east aren稚 too many transmission miles away.
Hydroelectricity is just one area and Bhutan is just one country. There could be other opportunities for mutually beneficial commercial cooperation, if we could present our neighbours with viable practical propositions. For example, a 澱attery・arrangement based on Bangladesh痴 abundant natural gas resources is a highly logical thing to pursue.
Unfortunately, politics isn稚 always about logic and we can do little but wait and keep pushing till Bangladesh comes to its commercial sense. But there痴 no reason why, with an honest, straightforward exchange of intentions, we can稚 do more with Bhutan and Nepal, two of our very neighbourly neighbours.


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