March 12, 2012
Electricity developer Lao Holding State Enterprise (LHSE) has pursued a path of rapid growth in the power sector during the seven years it has been in operation.
LHSE was established in February 2005 and its first investment was in the Nam Theun 2 (NT2) hydropower project, in which it holds a 25 percent share.
Speaking at the company’s annual meeting in Vientiane on Friday, General Manager Dr Somboune Manolom said “Now we are a shareholder in nine power plant construction projects with installed capacity of 5,393 megawatts (MW) and the ability to generate about 29,220 million kWh annually.” Dr Somboune said the nine projects represented an investment of about 86 trillion kip (US$10,730 million), including US$715 million from LHSE.
Friday’s meeting was attended by Energy and Mines Minister Mr Soulivong Daravong, along with officials from the ministries of Finance, Planning and Investment, Home Affairs, Natural Resources and Environment, and Justice, as well as staff from other companies.
The nine hydropower plants in which LHSE has a stake are NT2, Nam Ngum 3, Xe Pian-Xe Nam Noi, Nam Ngiep 1, Nam Theun 1, Xekong 4, Xekong 5, Nam Kong 1 and Hongsa Thermal Electric Power.
Dr Somboune said 2011 was the first year the enterprise earned income from NT2 worth about 271 billion kip (US$33.79 million), including dividends worth about 117 billion kip (US$14.6 million). This figure was a 21.4 percent increase from the target of about US$12.1 million.
The company paid taxes of US$1.46 million. “This was also 21.4 percent over the target,” Dr Somboune said.
Construction of the Hongsa Thermal Electric Power plant began in October 2010 and was 9.7 percent complete by the end of last year. The project is set for completion by the end of 2015.
“This plant is the largest power project to be built in Laos, with a value of 29.7 trillion kip (US$3,710 million), including US$220 million in Lao government shares,” he said.
The Nam Ngum 3, Xe Pian-Xe Nam Noi and Nam Ngiep 1 hydropower plants are undergoing the final negotiations for agreements and construction will then go ahead, a press release noted.
“Construction of these plants will start by the end of this year or early next year. We expect them to be complete and begin commercial operation in 2017 and 2018,” Dr Somboune said. Memorandums of understanding on tariff rates had been signed with electricity purchasers, he added. Other agreements will soon be signed with the government, including concession agreements, power purchase agreements and financial agreements.
Documents are being prepared for four other projects that will be put forward to the government this year.
At the meeting, in recognition of the company’s five-year anniversary, on behalf of the government Mr Soulivong presented Labour Order medals classes 1, 2 and 3 to the LHSE and to staff who had been particularly productive. Other awards presented included labour medals and government certificates of congratulations.