Increasing demands for energy to boost economic development in the Lower Mekong Basin has attracted the keen interest of its riparian countries in capitalising on rich water resources of the Mekong River for hydropower development. This has been evidenced by extensive investment in hydropower projects (both tributaries and mainstream) across the region over the last few decades. Drawing on the qualitative discourse analysis of hydropower development and power trade from the case study of Lao PDR, this paper attempts to examine how the state’s political decisions in hydropower development are linked to the contemporary energy demands in the region, and how this shapes the national energy development trajectory in the future. The paper argues that, while neighbouring countries have shifted their national policy towards other energy alternatives (e.g., alternative energy development plans of Thailand) driven by negative impacts and political dynamics associated with hydropower dams, Lao government persistently holds on to large-scale hydropower projects to secure bulked energy production for export and development of the national economy. The paper directs further questions into ‘sustainable’ hydropower development and its implications for the regional sustainability.