Laos' Deputy Minister of Energy stated that the country is considering stopping electricity supply to cryptocurrency mining farms before the first quarter of 2026. This move aims to reallocate domestic electricity resources to sectors that contribute more significantly to economic growth.

In 2021, Laos introduced policy adjustments that led to a rapid expansion of cryptocurrency mining activities, attracting numerous operators to this Southeast Asian landlocked nation due to its cheap non-fossil energy. However, Deputy Minister Chanthaboun Soukaloun announced on Thursday that the government currently plans to prioritize electricity supply to areas such as artificial intelligence data centers, metal smelting, and electric vehicles.

Soukaloun noted that Laos has begun gradually reducing power supply to cryptocurrency mining farms. Currently, these farms consume approximately 150 megawatts of electricity, a 70% decrease from a peak of 500 megawatts during 2021-2022.

Greater Value in Other Sectors "Compared to the value created by supplying power to industrial or commercial users, the cryptocurrency industry provides limited value. In 2021, when there was an oversupply of electricity domestically, we proposed supplying power for cryptocurrency mining," Soukaloun explained, adding that the cryptocurrency sector creates very few jobs and lacks a supply chain that benefits the overall economy.

Soukaloun mentioned that Laos initially planned to stop supplying power to mining farms this year, but due to ample rainfall and increased output from hydroelectric plants, as well as the ability to expand electricity exports to neighboring Thailand and Vietnam, power supply has continued.

"I believe we may completely stop supplying power to cryptocurrency mining farms by the end of the first quarter of 2026," he stated in an interview during the ASEAN Ministers on Energy Meeting.

Reuters has yet to identify an association representing the cryptocurrency mining industry or to determine which specific mining farms are currently operating in Laos.

Laos is often referred to as the "battery of Southeast Asia" due to its hydroelectric export potential, playing a crucial role in the region's clean energy transition. Importing hydroelectric power from Laos is vital for neighboring countries that face challenges in scaling up solar and wind energy in their pursuit of carbon neutrality.

Soukaloun revealed that most of Laos's hydropower is exported through cross-border agreements to independent power producers in Thailand and Vietnam, and the country is considering further enhancing its power export capacity to Vietnam — the current export capacity to Vietnam stands at 8,000 megawatts.

China-Laos Arbitration Dispute and New Power Exports Soukaloun stated that Laos is engaged in bilateral consultations with China regarding an arbitration case. In this case, a subsidiary of China Power Construction Group (a state-owned enterprise) initiated arbitration against Electricite du Laos (EDL) seeking $555 million in payments for a hydropower project, which has a total investment of $2.73 billion.

"According to the power purchase agreement, they [the Chinese party] have the right to litigate. We must wait for the arbitration process to conclude; this process will continue unless the claimant withdraws the claim," Soukaloun said.

When asked whether Laos has requested modifications to the claim amount, he declined to comment, citing confidentiality, but pointed out that the debt arises from discrepancies between anticipated and actual project demand.

Soukaloun also noted that Laos expects to resume electricity exports to Singapore through the “Laos-Thailand-Malaysia-Singapore” (LTMS) power transmission corridor “soon,” though he did not provide further details. Last year, authorities from Thailand and Singapore stated that electricity exports through this corridor had been suspended pending finalization of the extension terms for the agreement by Thailand.

On Thursday, the four countries issued a joint statement reaffirming their commitment to advancing multilateral cross-border electricity trade and engaging in further consultations, but did not specify a timeline for the restoration of exports.