February 9, 2012
Electricite du Laos (EDL) and Sinohydro Corporation Ltd of China yesterday signed a contract and memorandum of understanding (MOU) on four hydropower development projects in two northern provinces.
Among the documents signed were an engineering procurement and construction contract for the Nam Khan 3 hydropower project in Luang Prabang province, and a tariff MOU for the Nam Ou 2, 5 and 6 hydropower projects in Phongsaly and Luang Prabang provinces.
The signing was witnessed by Deputy Prime Minister Somsavat Lengsavad, Chinese Ambassador to Laos Ms Bu Jianguo, energy developers, and officials from various ministries.
The Nam Khan 3 dam, located in Xiengngeun district, will have an installed capacity of 60MW and will be able to generate 241 million kWH of electricity per year, according to a press release provided at the signing ceremony. The dam will take about 3.5 years to build, with developers expecting it to be fully operational in 2016, the press release noted.
“The Lao government will invest about 1 trillion kip (US$127 million) in the project through a low interest loan from the Exim Bank of China,” EDL representative Mr Komonchanh Phet-asa said, adding that the project will provide farmers in Luang Prabang with more access to water for irrigation.
Nam Ou projects 2, 5 and 6 will have a combined installed capacity of 540MW and will be able to generate 2,092 million kWH of energy per year.
“The energy generated from the three power plants will be sold to EDL starting in 2018,” Mr Komonchanh said, explaining that negotiations regarding a power purchase agreement will take place in the future. He said the electricity generated will mainly supply the northern provinces and the high speed Laos-China railway project, while the rest will supply the central and southern provinces.
“The three projects are expected to require investment of about 8 trillion kip (US$1,000 million) and EDL will hold 15 percent of shares,” Mr Komonchanh said.
Investment in hydropower projects in the northern provinces is growing rapidly, which is helping the government to meet its plan to supply mains power to over 90 percent of families in the area by 2020.
Construction of three new projects officially began in December, namely the Nam Long project in Luang Namtha province, the Nam Ngiep 2 project in Xieng Khuang province and the Nam Khan 2 project in Luang Prabang province, with many more set to be built soon. “Only 65 percent of families in the northern provinces currently have access to electricity,” Deputy Minister of Energy and Mines Mr Khammany Inthirath said recently.
“About 802,400 families living in 5,934 villages in 139 districts nationwide have access to electricity, which represents 76.9 percent of the total households in the country.”
“By 2015 we want to increase the number of households with access to electricity to about 85 percent. We hope we can increase this number to more than 90 percent by 2020.”