Sơn La: The Hydropower Plant Catalyzing Socio-Economic Development in the Northwest Region
Home to the largest hydroelectric power plant in Southeast Asia, Sơn La province holds a strategic position in Vietnam’s development and defense. Sơn La is a mountainous province inhabited by 12 ethnic groups, located in the heart of the Northwest region, bordering Lai Châu and Yên Bái provinces to the north, Thanh Hóa province and Laos to the south, Hòa Bình and Phú Thọ provinces to the east, and Điện Biên province to the west. It is the third-largest province in Vietnam and the biggest in the North.
As a key national project, the Sơn La Hydropower Plant, located in Ít Ong commune, Mường La district, is the largest hydroelectric power plant in Vietnam and Southeast Asia. Construction began on December 2, 2005, and it was inaugurated on December 23, 2012, three years ahead of schedule.
Occupying the second tier in the cascade system of hydropower plants on the upper Đà River, the plant has an installed capacity of 2,400MW, consisting of 6 generators, each with a capacity of 400MW. The plant supplies electricity to the national grid with an average annual output of 10.246 billion kWh, providing the impetus for socio-economic development in the Northwest region.
The construction of Southeast Asia’s largest hydropower plant entailed several notable aspects. Notably, to fill the Sơn La reservoir, over 20,000 households in Sơn La, Điện Biên, and Lai Châu provinces were relocated to new resettlement areas. As per the Prime Minister’s decision in 2012 on the provisional approval of the adjusted total investment, the project cost nearly VND 60,200 billion, including nearly VND 16,900 billion in state budget funds.
As of June 30, 2024, the total electricity output of the Sơn La Hydropower Plant stood at 107.396 billion kWh, contributing over VND 13,000 billion to the state budget.
Sơn La’s Economic Landscape:
According to the Provincial Statistics Office, the provincial gross regional domestic product (GRDP) in 2023, in current prices, is estimated at over VND 67,700 billion, with a per capita GRDP of approximately VND 51.7 million per year. In terms of structure, the service sector accounts for the highest proportion, at 41.55%, followed by industry and construction (27.04%), and agriculture, forestry, and fisheries (24.55%).
Sơn La’s economic growth has not been truly sustainable. In 2023, the GRDP, in comparable prices, is estimated at VND 34,506 billion, reflecting a modest increase of 0.75% compared to the previous year, falling short of the targeted 7.5% growth rate. In terms of GRDP growth rate, Sơn La ranks 12th in the Northern Midlands and Mountainous regions and 58th nationwide, marking the province’s lowest growth rate during the 2019-2023 period. For 2024, Sơn La aims for a GRDP growth rate of at least 7.5% and a per capita GRDP of VND 55.5 million.
Sơn La’s GRDP Growth Rate (Source: Provincial Statistics Office)
In the first half of 2024, the estimated GRDP, in comparable prices, reached nearly VND 14,650 billion, reflecting a 0.67% increase compared to the same period last year. This places Sơn La 14th in the Northern Midlands and Mountainous regions and 62nd nationwide in terms of growth rate, just ahead of Bà Rịa – Vũng Tàu, which experienced negative growth. The service sector recorded the highest growth (5.74%), followed by agriculture, forestry, and fisheries (0.59%). In contrast, the industry and construction sector contracted by 6.36%, reducing the GRDP growth rate by 1.60 percentage points.
Sơn La’s economic landscape is heavily influenced by weather conditions. According to a report by the Provincial Statistics Office, business and production activities in the first half of 2024 faced challenges due to low rainfall, reduced water flow into hydropower reservoirs, and the implementation of power reduction plans by major hydropower plants following instructions from the National Load Dispatch Center. Additionally, extreme weather conditions, prolonged heat waves, low rainfall, hail, and storms significantly impacted the province’s agricultural sector.
From the beginning of the year to early August 2024, Sơn La granted investment registration certificates to six projects with a registered capital of nearly VND 128 billion, representing a 1.5-fold increase in the number of projects and a fivefold rise in total investment compared to the same period last year. The province also adjusted the total investment of one project, resulting in an additional investment of VND 80 billion. Cumulatively, the province has had 15 projects with selected investors as per legal regulations.
Vision to Become a Key Development Hub in the Northwest Region
According to the Master Plan for the 2021–2030 period, with a vision towards 2050, Sơn La aims to become a rapidly developing, comprehensive, sustainable, and equitable province by 2030. As the northernmost province with the most extensive territory, Sơn La strives to be one of the leading provinces in the Northern Midlands and Mountainous regions, serving as a hub for tourism in the Vietnam-Laos border area and the Northern Midlands and Mountainous regions, as well as a center for agricultural product processing in the Northern Midlands and Mountainous regions.
The province aims to establish seamless connections with major socio-economic centers in the region, the country, and the international community within the Mekong Sub-region, neighboring countries, and ASEAN.
The Master Plan envisions Sơn La as a critical development hub in the Northwest region by 2050, boasting a synchronous and modern infrastructure system and a competitive economic foundation within the region and the country.
In terms of economic goals, the average growth rate for the 2021-2030 period is targeted to exceed 8%. Per capita GRDP is expected to surpass VND 60 million by 2025 and reach approximately VND 100-120 million by 2030. State budget revenue is projected to exceed VND 6,250 billion by 2025 and VND 8,000 billion by 2030. Total social investment for the 2021-2025 period is estimated at over VND 120,000 billion, and for the 2026-2030 period, it is expected to reach over VND 150,000 billion. The urbanization rate in the province is targeted to reach approximately 20.6% by 2025 and about 25.8% by 2030.
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