On April 24, 2025, according to revelations by the investigative outlet Intelligence Online, Thailand’s Ministry of Energy reportedly asked the Electricity Generating Authority of Thailand (EGAT), the state power utility, to halt the acquisition procedure launched by the Thai energy giant Gulf Energy Development for two hydroelectric projects in Laos: Pak Lay and Pak Beng. The decision is said to have been motivated by concerns over Gulf’s financial capacity, by resistance from the Laos side, and by the sensitive Chinese presence in the project: in 2023, Gulf acquired a stake in Sinohydro, China’s leading state-owned hydropower company. This spectacular setback highlights the web of influence struggles unfolding along the river.
China’s Hand on the Regional Tap
In the upper Mekong — known as the Lancang in China — Beijing has built eleven major dams in Yunnan Province, with a combined installed capacity of more than 21 gigawatts (GW), according to the Mekong River Commission (MRC). This intergovernmental body, founded in 1995 by Laos, Thailand, Cambodia and Vietnam, aims to coordinate management of the river.
China, which holds only observer status within the MRC, nonetheless controls the seasonal flow to downstream countries. In 2019, an independent study by the U.S. hydrological firm Eyes on Earth, conducted under the Lower Mekong Initiative (a program launched by the U.S. State Department in 2009), found that Beijing had withheld large volumes of water despite abundant rainfall. This retention triggered a historic drought in Vietnam’s delta and Cambodia’s plains.
The study’s conclusions were later acknowledged by the MRC, which saw them as confirmation of the hydrological imbalances caused by China’s dam control. In this context, any regional energy actor must reckon with a structural fact: the “tap” is in Beijing’s hands.
Laos’ Hydropower Gamble
This reality has not deterred Laos, a small landlocked state, from making hydropower its main engine of economic development. Over the past two decades, Vientiane has multiplied long-term concessions granted to foreign partners. According to the Asian Development Bank (ADB), nearly 80% of the electricity produced in Laos is exported, mainly to Thailand, but also to Vietnam and Cambodia.
This strategy rests on growing financial dependence: Lao public debt has reached 110% of GDP, according to the International Monetary Fund (IMF) (2024). The Pak Lay and Pak Beng projects, located on the Mekong’s main course, fit this model: they are intended to boost Laos’ export revenues while consolidating its place in the regional power grid. But this reliance on foreign capital leaves the country vulnerable to political and economic forces far beyond its control. Laos is betting on becoming the region’s electricity supplier — using its neighbors’ capital to do so.
Chinese Railways and Regional Reconfiguration
The Mekong is not only a river — it is also a valley, a communication corridor for centuries. Along this route, China has for years pursued an ambitious logistical influence strategy. In December 2021, it inaugurated the China–Laos railway, a 414-km line linking Boten (on the Chinese border) to Vientiane. This project, integrated into the Belt and Road Initiative, is expected to eventually extend to Bangkok and then Singapore.
According to the World Bank, the line could cut transport costs between Yunnan and Bangkok by 40% and carry up to 10 million tonnes of goods per year by 2030. It turns Laos into a logistical pivot for Chinese penetration into Southeast Asia, while forcing Thailand to confront a strategic dilemma: attach itself to this Eurasian spine, or risk being bypassed.
These infrastructure projects complement Beijing’s hydropower and energy leverage: China not only controls the river, it is also shaping the physical and economic corridors that surround it.
Gulf Energy as a Revealing Case
These regional dynamics leave little room for private actors to operate in a neutral space. The Gulf Energy episode is a telling illustration. Founded in 2007, Gulf Energy Development is a Thai energy conglomerate led by Sarath Ratanavadi, who in just a few years has become one of the country’s most powerful businessmen. The group has established itself as a major player in power concessions while pursuing cross-border projects to expand its influence.
Its partnership with Sinohydro, one of the Chinese state’s main operational arms in hydropower, aimed to secure a key position in the regional energy redistribution game. But the April decision revealed the limits of this strategy: distrust from Thai authorities, hesitation from the Lao side, and, above all, Beijing’s weight.
Gulf Energy is not the driver of these dynamics but their revealer: a private actor whose ambitions illuminate the deeper power structures now shaping the Mekong.