Power Struggle: Chinese Firm Sues Laos Over Unpaid Hydropower Project Dues

Nam Ou Power, a unit of China's Power Construction Corp, has filed a $555 million arbitration case against Lao utility Electricite du Laos for unpaid dues related to the Nam Ou River Cascade Hydropower project. This marks the first international arbitration by a Chinese state-run entity against a Lao government-run firm.

Nam Ou Power, a division of China's state-owned Power Construction Corp, has initiated a $555 million legal battle against Electricite du Laos (EdL) in Singapore. The case revolves around unpaid dues from a hydropower project operated by Nam Ou Power, as revealed in an arbitration filing reviewed by Reuters.

This significant move by Nam Ou Power marks the first instance of international arbitration involving a Chinese state-run entity suing a Laos government-managed firm. The arbitration details, now being reported for the first time, highlight the strategic implications amid ongoing Western scrutiny of China's substantial investments in developing countries.

The dispute centers on electricity generated from the $2.73 billion Nam Ou River Cascade Hydropower project, which comprises 7% of Laos' 18-gigawatt hydropower capacity. As Laos aims to become the "battery of Southeast Asia," financial strains related to Chinese-backed infrastructure projects have raised concerns over the nation's growing debt burden.

(With inputs from agencies.)