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Hydropower developers, bank ink finance deal
The China Development Bank will provide funds or loans for the seven hydropower plants to be built on the Nam Ou River in Phongsaly and Luang Prabang Provinces.
Electricite du Laos (EDL), Sinohydro Corporation Limited and the bank signed financial cooperation agreements for the project yesterday in Vientiane.
“The project is estimated to cost over 16 trillion kip (US$2 billion),” an EDL senior official said.
He said EDL, on behalf of the Lao government, will hold a share of 15 percent and Sino will hold 85 percent.
However the investors have not decided when construction will start because “we will have to discuss or negotiate further details on the loans,” the official said.
The two developers are also in negotiations for the power purchase agreement. “The generated electricity will be sold to the EDL power grid to supply the local market and for export to Thailand, Vietnam and China,” he said.
The project will take place in two phases. Phase one will consist of three dams, mainly in Luang Prabang.
The second phase will build four dams in Phongsaly province.
“Based on the plan, we hope phase one will be completed and will have begun commercial operations by 2016,” he said.
The finance agreement was signed after Sinohydro signed a master plan for the Nam Ou hydropower development project with the Planning and Investment Ministry last week.
Under the plan, Sinohydro will build two major reservoirs and seven hydropower plants along the 475km Nam Ou - one of the largest tributaries of the Mekong.
The river rises in China and runs through Phongsaly province before entering the Mekong River at Pak Ou in Luang Prabang province.
When operational, the seven power stations will have a total production capacity of 1,156 megawatts (MW), generating 5 billion kilowatts hours a year of electricity.
Sinohydro is negotiating a concession agreement with the Lao government and hopes to finalise the document by the middle of this year.
The developer signed the project agreement with the Lao government in 2007 and renewed it in early 2010. The company presented a project feasibility report to the government at the end of 2010.
According to the feasibility study, the Nam Ou will be able to supply enough water to power the plants as it runs through mountainous forested areas and valleys and has 11 major tributaries.
Warm moist air from the Bay of Bengal and the South China Sea also bring much rainfall to the river area.
Laos will witness the opening of at least two new power plants each year between now and 2020. In 2006 the country had only 10 power plants with a total capacity of 700MW. Now it has 14 plants with a total capacity of 2,540MW.
According to the Energy Promotion and Development Department of the Ministry of Energy and Mines, excluding the mainstream Mekong River, Laos has the potential to generate about 26,500MW from hydropower sources.
vientiane times
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