Long before Laos became known for large dam projects involving investors from China and Thailand, the country had already begun building its ambition to become a regional power exporter.
That effort began while civil war was still dividing Laos. About 70 kilometers north of Vientiane, the Nam Ngum 1 Dam was built and later became the starting point for the development of large-scale hydropower in the country.
An Idea Born Amid Civil War
The idea of developing hydropower on the Nam Ngum River dates back to 1957. That year, Prince Souphanouvong, who would later become the first president of the Lao People’s Democratic Republic, met Japanese engineer Kubota Yutaka. They discussed the hydropower potential of the Nam Ngum River.
Laos began more serious exploration of its hydropower potential in the early 1960s. In December 1962, a feasibility study was presented as the first detailed plan for what would later become the Nam Ngum 1 project.
Funding for the project eventually involved nine countries. The Nam Ngum Development Fund Agreement was signed at the World Bank headquarters in Washington, DC, on May 4, 1966, by Australia, Canada, Denmark, Japan, Laos, the Netherlands, New Zealand, Thailand, and the United States. The World Bank acted as administrator of the fund, with total grant commitments of about US$22.8 million.
The United States agreed to cover half of the estimated construction cost. France later joined with a commitment of US$600,000. Thailand contributed US$1 million worth of cement, while Japan financed construction design work worth US$315,000.
All of this took place while the Laotian Civil War was still raging. The conflict, which began in the late 1950s, was part of the wider Indochina conflict involving the United States, North Viet Nam, and various factions in Laos.
Nam Ngum 1 was also the only hydropower project to be completed through regional cooperation under the Mekong Committee.
From 30 to 275 Megawatts
Construction of the first stage began in 1968 at a cost of about US$28 million. By August 1971, Nam Ngum 1 had begun commercial operations and was generating electricity.
Construction continued in three stages through 1984. The dam created a reservoir covering about 370 square kilometers, with a storage capacity of around 7 billion cubic meters of water.
The plant initially had a capacity of about 30 megawatts. After the first three stages were completed in 1984, capacity reached 155 megawatts. A further expansion in 2022 brought total capacity to 275 megawatts.
Nam Ngum 1 was not the first hydropower plant to operate in Laos. Two small plants, Nam Dong in Luang Prabang and Xe La Bam in Champasak, had already begun operating in 1970, with capacities of 1 and 5 megawatts respectively.
But Nam Ngum 1 was the first medium-to-large-scale hydropower project built in Laos and marked a shift in the country’s energy policy.
Selling Power to Thailand From the Start
From the time it began operating in 1971, most of Nam Ngum 1’s electricity was sold to Thailand through the Electricity Generating Authority of Thailand (EGAT).
Laos thus became a net electricity exporter from that point onward, a status it has maintained to this day. Around 70-80 percent of the electricity generated by Nam Ngum 1 is still sold to Thailand, while electricity export revenues account for about a quarter of Laos’ total foreign exchange earnings.
The model later became the foundation of Laos’ energy strategy: develop hydropower capacity beyond domestic demand and sell the electricity to neighboring countries.
Since 1993, the Lao government has pushed for the development of hydropower plants aimed at exports to Thailand, Viet Nam, and Cambodia. The strategy later became widely known as the ambition to make Laos the “Battery of ASEAN.”
According to data from Electricite du Laos, around 90 percent of Laos’ hydropower production was being exported by the late 2010s. Projections for 2020 included exports of 9,000 megawatts to Thailand, 5,000 megawatts to Viet Nam, 300 megawatts to Malaysia, 200 megawatts to Cambodia, and 100 megawatts to Myanmar.
An Ambition Gradually Softened
The “Battery of ASEAN” label was later played down by the Lao government. At the World Economic Forum on ASEAN in Hanoi in September 2018, Prime Minister Thongloun Sisoulith described the “Battery of Asia” or “Battery of ASEAN” label as an exaggeration. The terms were used more often by international media and analysts than as an official government slogan.
The statement came two months after the Xe Pian-Xe Namnoy Dam collapsed in Attapeu Province in July 2018, killing at least 71 people.
Even so, Thongloun continued to stress the importance of hydropower to Laos. Electricity exports to neighboring countries also continued, although with a more cautious approach following the incident.
The Nam Theun 2 Dam was subsequently promoted by the Lao government and the World Bank as a “model” hydropower project built around international standards.
But the basic model pioneered by Nam Ngum 1 more than five decades ago remains part of the strategy: using domestic rivers to generate electricity and selling that power across borders as a source of foreign exchange.
