Independent Power Producer (IPP) project development in Lao PDR involves many ministries and agencies of Government of Lao PDR (GOL) such as Ministry of Planning and Investment (MPI), Ministry of Energy and Mines (MEM), Ministry of Finance (MOF), Ministry of Natural Resource and Environment(MONRE), Ministry of Agriculture and Forestry (MAF), Ministry of Public Works and Transportation (MPWT), Ministry of Justice (MOJ) and Central Bank of Lao PDR, etc.
GOL committees, departments and agencies shares responsibilities in IPP promotion, development, construction, operation, agreements and contracts administration, supervision of implementation of social and environmental plans, etc. Institutional arrangements are varied from time to time as GOL develops and refines its policies for private sector participation in electric power projects.
The functions of key agencies and their role in IPP procurement are outlined below.
Ministry of Planning and Investment (MPI)
The MPI is a high level committee established within the Prime Minister’s Office. MPI is the agency charged with the responsibility for entering into commitments with IPP developers and it therefore signs Memorandum of Understanding (MOU), Project Development Agreement (PDA) and Concession Agreement (CA) on behalf of GOL.
Ministry of Energy and Mines (MEM)
Overall responsibility for power sector development is vested with Department of Energy Business (DEB) within the MEM.
MEM has primary responsibility for policy formulation and strategic planning which are taken jointly with the MONRE, MPI and other agencies as relevant to the situation. It also has responsibility for preparing and implementing legislation and regulations, collecting and processing data on electricity generating potential, administration and inspection of electricity enterprises.
MEM has a number of planning and regulatory functions in the development of IPP which include:
* Promotion of pipeline of projects (database);
* Formulation of power sector policy and procedures;
* Reviewing IPP studies and agreements;
* Participation in tariff negotiations with foreign investors;
* Monitoring environmental impacts and environmental Management Plans in cooperation with MONRE and other relevant ministries, agencies and local authorities;
* Establishment and monitoring of technical standards.
After reviewing technical studies prepared by developers promoting IPP projects, DEB formally issues a certificate of no objection.
Ministry of Finance (MOF)
The MOF is responsible for putting GOL’s fiscal and monetary policies into effect, either by direct control or through the Central Bank of Lao PDR. In this capacity, MOF approves loans and issues sovereign guarantee on behalf of GOL and in compliance with GOL’s international covenants. MOF holds accounts at Central Bank that receive soft loans that are on-lent to power sector projects.
Where GOL equity in IPP projects is financed by International Financial Institution (IFI) loans the loans are channeled through the MOF before being on-lent to the agency designated as the GOL shareholder.
Ministry of Natural Resource and Environment (MONRE)
MONRE was established on 10 May 2007, by Prime Minister Decree No. 149/PM; as the main coordinating agency for environmental planning and management across all sectors. Its responsibilities are set out in Article 36 of the Environmental Protection Law and include implementing the National Social & Environmental Action Plan, forming environmental policy, issuing and revoking of licenses to organizations involved in providing environmental services, receiving and evaluating Social-Environmental Impact Assessment (SEIA) and other