Written by Mekong Institute

The focus  of  this  study  was  to  analyze  the  impact  of  the  investment  in  the  Hongsa Lignite Power Plant on the Lao economy in 2015 using an input-output approach and data from the investment project (including data from a factory pre-feasibility study), as well as data from the sectors involved. The study concludes that the impact of the investment, which was worth 4,288  billion  kip, in  the  Hongsa  Lignite  Power  Plant  on  the  electricity,  construction  and transport sectors, as well as on other services, has increased the Lao economy s total output by 6.7% for a value-added amount of 7,245 billion kip.

Based  on  the  input-output  table,  the  study  also  finds  that  the  main  sectors  impacted  by  the economys  output  and  backward  linkages  are  the  sectors of  wood  and  paper,  transport equipment, textiles and apparel, and food and beverages. In addition, the study found that the sectors  of  the  input  multiplier  are  the  sectors  of  financial  intermediation  and  business activities,  chemical,  mineral  and  metal  products,  and  wholesale  trade.  The  outputs  of  these sectors are used as inputs by other sectors.

The  study  concludes  that  the  Hongsa  Lignite  Power  Plants  has  contributed  to  the  Lao economy.  More  generally,  it  shows  that  an  input-output  table  could  be  a  useful  tool  for finding the main sectors involved in the generation of an economys output. The table is also a tool used to set priorities for the effective planning and achieving of economic growth and investment goals.