The Off-grid component of the Rural Electrification Program involves the participation of many actors under the
overall supervision of the Ministry of Energy and Mines and the direct management of the VOPS Office.
The PESCOs are the key implementing agents as they are responsible of planning, installation, operation and
maintaining the systems in the provinces all over the country. After intensive training by VOPS on all aspects of the
program, they deliver these services through village entrepreneurs (known as Village Electricity Managers or VEMs)
with whom they have an agreement. These VEMs in turn sign hire-purchase contracts with customers.
The contractual relation with the customers is governed by individual contracts. In the case of SHS, the VEM’s
customers are individual families who pay monthly installments over an agreed period, generally 10 years. They
become the owners of the equipment once all monthly repayments are made. In the case of village hydro and
improved gen-sets, the local operator sign a contract with customers who pay proceed to monthly payments based
on metered consumption. He is also responsible of a maintenance and diesel fund available to run the diesel-fuel
generator when needed. The VEMs become owners of the equipment on behalf of the community after termination
of the agreed hire-purchase period.
In each province, other key actors are the Provincial Department of Energy and Mines which besides playing the
role of regulator for the development of these energy systems and inspector for the quality of services, also provide
valuable support to identify the areas for further expansion of the program, liaise with various authorities at local,
provincial and national level and ensure a smooth implementation of the off-grid electrification. In the village, the
VEAC (Village Electricity Advisory Committee) acts as the village-level overseer and facilitator of the electrification
A schematic representation of the off-grid implementation modality is presented here after:
Village Off-Grid Promotion and Support
EVERY NIGHT, LIGHT
A set of incentives have been set up to ensure the viability and sustainability of the program and its main actors.
The remuneration of the PESCOs and the VEMs and the contribution to the participation of the PDEMs and VEACs
are governed by the guideline for incentives which determines the level of incentives for each step of the
installation and operation of the systems. The payment by the customers is also regulated by the tariff leaflet which
includes the installation fee and the monthly repayment level for each size of solar home system and each kind of
hire-purchase contract. The new tariffs grid is the following:
Amounts in Lao kip (1 $ = 9,600 kip as of November 2007).
A Rural Electrification Fund (REF) has been set up. It received all payments made by the customers under the
off-grid program. The VOPS has the ability to use the resources from the REF to pay the PESCOs, the VEMs and
other players. The overall supervision of the REF operations is done by a Fund Manager (FM) assisted by a
Secretariat and the Rural Electrification Fund Advisory Committee (REFAC) which supports the Ministry in
overseeing the work of the Fund Manager, his delegates and VOPS.