EDL signs on for Hongsa electricity

EDL signs on for Hongsa electricity

Electricite du Laos (EDL) signed a power purchase agreement with Hongsa Power Co Ltd yesterday in Vientiane, finally concluding a protracted negotiation period.

“We took about two years to negotiate the agreement,” an EDL official said at the ceremony.

EDL will purchase 100 megawatts (MW) of electricity from the Hongsa lignite-fired power plant that is currently being built in Hongsa district, Xayaboury province, and which will have an installed capacity of 1,878MW.

EDL Managing Director Mr Khammany Inthirath said “The electricity will mainly be sent to the northern provinces because we don't have adequate energy to supply that region at present.”

Mr Khammany said currently power is imported from neighbouring China, Thailand and Vietnam for supply to the provinces of Bokeo, Xayaboury, Huaphan and Luang Namtha.

The purchase agreement will begin in June 2015, or once construction of the power plant is completed and energy generation begins, and will last for 25 years. EDL will pay 6 US cents per kWh under the agreement.

Hongsa Power Company Chairman Mr Noppol Milinthanggoon said the agreement with EDL will bring in substantial income for the company of about 106 billion kip (US$13.2 million) per year.

“ That comes to about 2.6 trillion kip (US$330 million) over the 25 year life of the agreement,” Mr Noppol said.

The plant will sell 75MW of power to a lignite factory in Xayaboury province and the remainder of the electricity generated will be exported to Thailand.

The Hongsa power plant will be one of the largest in South East Asia, and the largest power plant and lignite mine in Laos.

The project shareholders comprise Ratchaburi Electricity Generating Holding Public Company and Banpu Power Ltd of Thailand, which each hold a 40 percent share, and the Lao Holding State Enterprise, which holds a 20 percent share.

Construction of the facility started last October and includes road access to the project site, work on a dam, and the building of houses and facilities for more than 400 families to be relocated away from the project area.

The lignite-fired power plant will cost about 30.2 trillion kip (US$3.7 billion) to build, with 70 percent financed by loans and the remaining 30 percent provided by the company.

The project began with a survey for lignite in 1994 and consists of two phases: firstly, lignite will be mined locally to supply the plant and, secondly, power will be generated by the plant.

Laos will witness the opening of at least two new power plants each year between now and 2020. Currently 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