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Lao, Korean companies ink MOU for dam on Xepon River
Two energy developers, Korea Water Resources Corporation (K-water) and Electricite du Laos (EDL) yesterday signed a Memorandum of Understanding (MOU) for the Xepon 3 hydropower project in Saravan province.
“It is an important project for Saravan and Savannakhet provinces because we do not have any power plants that generate electricity to supply Savannakhet,” EDL Managing Director Mr Khammany Inthirath said.
EDL's Business-Finance Division Deputy Director, Mr Komonchanh Phet-asa, said that currently Saravan uses electricity from the province's Xeset 1 and Xeset 2 plants, while Savannakhet relies on electricity imported from Thailand. “Locally generated electricity will supply Savannakhet once the Xepon 3 plant is built,” Mr Komonchanh said.
The project is initially estimated to have a generating capacity of 70 to 100 megawatts, according to a recent report from the Ministry of Energy and Mines.
The project was originally to be built under an MOU with China National Machinery & Equipment Import & Export Corporation (CMEC) in 2008.
“However, the CMEC returned the project to the government,” Mr Komonchanh said.
K-water will develop the plant in cooperation with EDL as a Build, Operate and Transfer project, which will eventually see ownership and operation of the plant transferred to the Lao government.
According to a press release, the corporation will also assist EDL in obtaining debt and equity financing for the project from international or Korean financial institutions.
The release noted that K-water wishes to provide expertise and resources for the development of the project including the feasibility study, environmental impact assessment, social impact assessment, and design, financing, construction and operation of the plant.
The feasibility and assessment studies will provide definitive reports on the financial, social and environmental impacts and feasibility of the project.
The development site involves facilities and work areas necessary for implementing and operating the project, including access roads, land for temporary facilities, sites for power generation and transmission facilities, and rights of way.
EDL, a state-owned enterprise, has been given sole and exclusive rights to develop the natural resources of Laos for the benefit of the Lao people.
Developments envisioned by EDL include the Xepon 3 project for domestic power supply and the linking of the plant to the national power grid.
EDL has granted K-water the sole and exclusive rights to develop the project. This means EDL will not seek any other contractor, until the shareholder agreement between EDL and K-water is finalised and signed, for 18 months after the signing of the MOU (the sole and exclusive right period).
The feasibility study and environmental and social impact assessments will be carried out at K-water's expense.
The MOU may be extended for further periods, if the two parties require it and mutually agree.
vientiane times
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