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Lao, Chinese investors plan hydropower plant in Savannakhet
A Chinese company and a local firm expect to complete their feasibility study on the Xelanong 1 hydropower project in Savannakhet province within the next 12 months.
“After that we will present the results of the study to the government and ask for further approvals or agreements,” Sun Paper Holding Lao Co Ltd representative, Mr Wenjun Chen, said at a Memorandum of Understanding (MoU) signing ceremony on Tuesday.
The two companies, Sun Paper Holding from China and the local Daosavanh Investment & Construction Group signed the MoU for the project with the Planning and Investment Ministry in Vientiane.
The MoU will allow the investors to conduct studies that include assessments of the social and environment impacts of the project.
Before signing the MoU, the company had done an initial study on the proposed site and determined that it was suitable for development as a hydropower plant.
“However, we will have to see the results of the project study before we make our final determination,” Mr Wenjun said.
Xelanong 1, in Nong district, may be developed as either a medium or a large-scale project with a generating capacity of 80 to 100 megawatts (MW).
It will be a three-shareholder investment between the private Sun Paper Holding, Daosavanh and the Lao government.
“It will require an investment of about 1.2 billion kip (US$150 million) and Sun Paper Holding will be the main shareholder,” Mr Wenjun said.
Sun Paper Holding is a multinational paper making enterprise that is vertically integrated in all aspects of the production process, from planting and harvesting tress to producing paper.
A Sun Paper Group representative, Mr Zehua Liu, said the company established operations in Laos in 2007 to study potential investments including an industrial tree plantation in Savannakhet and building a papermaking factory.
There are plans for another hydroelectric project on the Xelanong River in Ta-oy district, Saravan province.
This project involves an investment of more than 701 billion kip (US$73 million), with Japanese company JRC Service Co Ltd holding 75 percent of the shares and the Lao government owning the remainder.
The government has stipulated that construction of this project must be completed by 2013.
The Xelanong 2 plant will generate 50MW of electricity which will be sold to Electricite du Laos. JRC is contracted to operate the project for a 30-year period.
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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