“Laos and China appear to be pursuing an ‘extend and pretend’ strategy, avoiding public acknowledgement of the failure of the ‘China model’ in Laos.”
Laos is suffering an acute debt crisis with no apparent way out. Public and publicly guaranteed debt now exceeds 100% of GDP. Over half of government revenues go to debt repayments.
Costly flagship projects like the $6 billion Laos-China Railway have drawn attention. However, the government's minority stake in the project has contained its role in Laos' debt crisis. The far larger debt burden stems from unplanned hydropower and energy transmission projects. Most of the dams and domestic transmission projects were financed by the 
Export-Import Bank of China and China Development Bank.
There’s a massive over-investment aimed at Laos' small domestic energy market. This has resulted in an estimated $3.9 billion in idled power capacity, roughly a quarter of Laos' entire GDP.
Although Laos' many export-based hydropower plants should be profitable, full state revenues are delayed for 25 to 30 years under BOT concession contracts with foreign investors.
In March, Power Construction Corp of China took Laos' state energy company to a Singapore arbitration court over $555 million in unpaid debt and interest.
The government has responded with tax hikes and state asset liquidations, including selling a 90% stake in the domestic electricity grid company to a Chinese company. An additional proposal to privatize and rebundle the majority of state hydropower assets suggests Laos may need to sell off the family silver to keep up debt repayments.
asia.nikkei.com/Opinion/Laos-r
Export-Import Bank of China and China Development Bank.
There’s a massive over-investment aimed at Laos' small domestic energy market. This has resulted in an estimated $3.9 billion in idled power capacity, roughly a quarter of Laos' entire GDP.
Although Laos' many export-based hydropower plants should be profitable, full state revenues are delayed for 25 to 30 years under BOT concession contracts with foreign investors.
In March, Power Construction Corp of China took Laos' state energy company to a Singapore arbitration court over $555 million in unpaid debt and interest.
The government has responded with tax hikes and state asset liquidations, including selling a 90% stake in the domestic electricity grid company to a Chinese company. An additional proposal to privatize and rebundle the majority of state hydropower assets suggests Laos may need to sell off the family silver to keep up debt repayments.
asia.nikkei.com/Opinion/Laos-r