EDL Spells Out Measures To Resolve Debt Problems
Source: Vientiane Times
The Reform Committee of Electricite du Laos (EDL) will roll out four measures aimed at resolving the company’s debt issues, ensuring the sustainability of its operations, and strengthening its business.
One of these measures will be overall reform of the organisation, including its operating mechanisms and staff, as well as revising the structure of electricity charges in ways that are fair for both energy providers and consumers.
This was the message from the Managing Director of EDL, Mr Chanthaboun Soukaloun, when he co-chaired a meeting to discuss the company’s business operations in Vientiane on Monday.
The board of directors will also enter into negotiations to revise electricity trading agreements with suppliers and investors with the aim of reducing capital costs and restructuring debts owed to banks and other financial institutions, he said.
The company’s debts are its main concern at present. Mr Chanthaboun said this issue could not be resolved without cooperation from all parties, including the government, the general public, energy producers, and financial institutions.
The primary goal of EDL, a state-funded enterprise, is to supply sufficient power for the needs of agriculture, industry, telecommunications, transportation, trade and travel, and to link all households in Laos to the electricity grid.
Over the years the government has invested a huge amount in the energy sector to drive socio-economic development and improve the quality of life of rural communities.
Currently, 95 percent of households are linked to the electricity grid, while 40 percent of the nation’s debt is due to heavy investment in the generation of electricity, Mr Chanthaboun said.
The company’s massive debt has accumulated because of outstanding payments owed by consumers and the large amount of money borrowed for investment purposes, he added.
EDL’s financial problems have been exacerbated by the unfavourable kip-dollar exchange rate, as electricity bills are paid in kip but the company must repay its loans in dollars.
The poor performance of numerous state enterprises, which are making huge losses and creating massive public debt, has added to the government’s economic woes.
The government hopes that the reform of EDL will prevent the further loss of assets and create conditions conducive to strong business performance.
The newly appointed Reform Committee will apply the recommended new working methods in the hoping of turning things around.
Following the appointment and reshuffle of senior EDL officials, the committee explained the various frameworks and measures it will employ to source more revenue, pay off its debts, and tackle other challenges and unresolved issues that have accumulated over the years.
Also speaking at the meeting, Deputy Minister of Finance Dr Phouthanouphet Xaysombath, who heads up the committee for reforming the operations of state-funded enterprises, including EDL, said “I want you all to be assured that after we overcome this crisis, we will be able to build a strong foundation and create comfort for our children, grandchildren and successive generations.”