A three-party agreement signed yesterday will see Malaysia import up to 100 MW of hydroelectric power from Laos via Thailand's grid.
The deal, officially called the "Energy Purchase and Wheeling Agreement", was signed yesterday at an Association of Southeast Asian Nations (ASEAN) meeting in Manila.
Represented in the agreement are power generator Electricite du Laos, the Electricity Generating Authority of Thailand and Malaysian utility Tenaga Nasional.
The pact is the first such cross-border transmission deal in ASEAN's history, officials said, and is the culmination of several years' worth of negotiations.
The deal is intended to support Malaysia's efforts to reduce the share of fossil-fueled assets in its current generating fleet, which rely predominately on diesel and coal. The country has said it hopes to cuts its carbon emissions nearly in half by 2030, per stipulations of the Paris Climate Accord.
Laos as southeast Asia's battery
Laos has long been a hotbed for hydroelectric development, with the country having one of the highest potentials for hydro capacity in the region at an estimated 26,000 MW.
Still, government officials are eager to grow the Laos' hydro market even further, with only about a third of that potential having been realized. Statements made earlier this month by Minister of Energy and Mines Khammany Inthirath indicate Laos could have a cumulative hydro output of about 14,000 MW by 2021.
The country already sells power to Thailand, Vietnam, Cambodia, China and Myanmar, but the government -- by way of an agreement with the International Finance Corp. signed several weeks ago -- is looking to expand its exports even further.