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Nam Lik 1-2 generates revenue of US$13m in first six months
The Nam Lik 1-2 hydropower plant, a joint venture of China International Water Electric Corporation and Electricite du Laos (EDL), has generated revenue of US$13 million in its first six months of commercial operation.
EDL, which holds a 10 percent share in the US$150 million power plant in Feuang District, Vientiane Province, announced in its annual report at the end of last month that the joint venture plant has generated 277 million kWh of power since it began commercial operation in August last year, bringing in revenue of about US$13 million.
The figures reconfirm that hydropower investment is one of the best businesses in Laos as the country has plenty of rivers and mountainous terrain.
Soaring power consumption in Laos and neighbouring Thailand, Vietnam and Cambodia due to population and economic growth has also made hydropower investment in Laos more attractive.
All of the electricity generated by the Nam Lik 1-2 plant is sold to Electricity du Laos, a state-owned enterprise with a monopoly in electricity distribution in Laos.
According to the Ministry of Energy and Mines, construction of the 100MW Nam Lik 1-2 began in 2007, three years after the project was initiated. The Lao government granted an investment concession to the project developer in 2007.
According to the concession agreement, the company will own and operate the power plant for 25 years before handing it over to the Lao government.
The government has offered the project investors tax breaks on imported construction materials, vehicles and other related equipment in a bid to promote investment in the hydropower sector.
The government also offered the project developers lower royalty charges and a profit tax exemption over the period of the plant's commercial operation.
Most of the major power plants in Laos export electricity to Thailand, often leading to a shortage of power for domestic consumption.
According to EDL, commercial operations at the Nam Lik 1-2 got underway as the country faces a severe shortage of electricity for domestic use.
Last dry season Laos had to import large amounts of electricity from Thailand. Now the Nam Lik 1-2 plant will help the country to reduce its energy imports.
Demand for electricity in Laos increases by 10 to 20 percent every year due to the expansion of industry and the growing population.
The government is now promoting investment in the construction of small and medium sized hydropower plants to meet domestic needs.
The government also plans to expand the national electricity grid to all districts by 2015 and to 90 percent of Lao households by 2020. At present, about 70 percent of Lao families have access to electricity.
vientiane times
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