Power Struggle: China's PowerChina Takes Legal Action Against Laos Over Hydropower Dues

PowerChina sues Laos' Electricite du Laos for $555 million in unpaid dues from a hydropower project. The case marks the first international arbitration against a Lao firm by a Chinese entity. The project is part of China's Belt and Road Initiative, amid Laos' debt crisis.

Power Construction Corp of China (PowerChina) has initiated legal proceedings against Electricite du Laos (EdL), seeking $555 million in alleged unpaid dues. The case relates to electricity generated by the Nam Ou River Cascade Hydropower project in Laos, a vital part of China's Belt and Road Initiative.

Laos, aiming to become 'the battery of Southeast Asia,' has heavily invested in hydropower projects, many financed by neighboring China. However, these investments have led to financial strain and contributed to a looming debt crisis, exacerbated by the Covid-19 pandemic.

This unprecedented arbitration reflects growing tensions and the challenges faced by countries involved in China's Belt and Road projects. Both parties have yet to comment on the ongoing legal dispute impacting regional energy and trade policies.

(With inputs from agencies.)