Purpose
– The purpose of this paper is to analyse social and environmental sustainability considerations developed in Lao People's Democratic Republic (Lao PDR) and to identify problems and challenges related to sustainable hydropower planning and development.

Design/methodology/approach
– The paper is leaning on empirical analysis based on analysing primary and secondary data and information; official government documents and relevant literature, a series of workshops of the Future Resource and Economy Policies in Laos till 2020 Project (FREPLA2020), and interviews with government officials and experts.

Findings
– To achieve its socio-economic objectives, Lao PDR needs to manage its hydropower development to ensure environmental and social sustainability through developing of the legal, institutional and regulatory environment and strengthening of the institutional capacity of the sector, improving knowledge and data management, and developing institutional coordination across the government agencies.

Practical implications
– The paper suggests that the Lao government assesses strategically the hydropower development options, prepares capacity building plans, develops risk assessment and management, and learns from past hydropower developments.

Social implications
– The paper recommends using hydropower development generated revenues to poverty reduction activities and to strengthen participatory approaches.

Originality/value
– The paper can act as a discussion awakener, to help and give some guidance to decision makers and actors in the hydropower sector to integrate sustainable development considerations into hydropower development and planning.