Oudomxay to build small-scale hydropower plant
Oudomxay to build small-scale hydropower plant
Local construction companies will invest 64 billion kip (US$8 million) to build a small hydropower plant in Oudomxay province, hoping to sell power to Electricite du Laos (EDL) for consumption within Laos.
Oudomxay Planning and Investment Department Deputy Director, Mr Duangta Southivong, signed an agreement with DPS Road and Bridge Construction Company Director, Mr Kayphet Duangpraseuth, giving the green light for the private companies to build the Nam Ngao dam in Baeng district.
Senior provincial officials including Oudomxay Deputy Governor Ms Somly Souphanthong and Oudomxay Energy and Mines Department Director Mr Thongchan Souksakda attended the signing ceremony on September 12.
The DPS Road and Bridge Construction Company will hold 80 percent of the investment share and the rest will belong to the Electricity Installation and Construction State Enterprise. The joint venture will have 30 years to operate the power plant before transferring it to the government in accordance with the concession agreement.
Work is expected to begin on the 4.5MW hydropower plant in the near future, with the dam expected to create a large reservoir. It is anticipated construction will take three years. Under the concession agreement, the developers will deposit US$10,000 to guarantee the project. They will also pay a land concession fee to the local authorities, as well as Value Added Tax. The joint venture will begin to pay profit tax to the government after operating the power plant for 10 years. The local authorities have agreed to tax breaks for the companies involved. The small of the hydropower plant means it will have less impact on the environment.
The government unveiled its renewable energy strategy last year, offering a number of incentives to local companies to invest in small hydropower plants. The goal is for 90 percent of Lao households to have access to electricity by 2020.
Laos still imports a large amount of energy despite having built several large hydropower plants in the past five years. Most of the large plants have been financed by foreign companies, which plan to export the electricity generated.
The government approved an increase in electricity rates earlier this year, enabling EDL to purchase electricity from providers at higher prices. This makes investment in the electricity generation sector more attractive.
Oudomxay officials say construction of the Nam Ngao hydropower plant will be a major driving force for economic development in the province. The project will not only provide power for local consumption but will also help the province to become more prosperous.
vientiane times
