State power utility EVN will buy around 1.5 billion kWh of electricity a year from Laos for two years starting in 2021.
Under contracts it signed on Saturday, Vietnam Electricity (EVN) will buy over 596 million kWh a year from two hydropower plants belonging to Phongsubthavy Group and 632 million kWh from two plants belonging to Chealun Sekong Group from 2022.
From 2021 it will start buying 263 million kWh annually from another plant belonging to the latter company.
The import was approved by the Vietnamese government to mitigate power shortages predicted to hit the country from this year.
The Ministry of Industry and Trade estimates shortages of 3.7 billion kWh in 2021 and nearly 10 billion kWh the following year.
2023 will be the most stressful with the shortage expected to be around 15 billion kWh. From then on it will decrease, with the shortage expected to come down to 7 billion kWh and 3.5 billion kWh in 2024 and 2025 respectively.
The industry ministry has said not more than 5-8 percent of electricity can be conserved, and the only way out is to import more from Laos and China.
But buying from neighboring countries is only a band-aid solution, and in the long run it is necessary to speed up work on large power generation projects, it stated.