ADB backs Nam Ngiep 1 power project
ADB backs Nam Ngiep 1 power project
The Asian Development Bank (ADB) is supporting a 290-megawatt hydropower project in Laos under a public-private partnership arrangement.
The bank announced recently that it had signed financing agreements for an assistance package consisting of a US$50 million direct loan, a 3.04 billion Thai baht-denominated loan (US$95 million), and a B loan of US$72 million for the Nam Ngiep 1 Hydropower Project in the central part of the country.
The syndicated B loan is funded by The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation and Mizuho Bank Ltd., with ADB acting as lender of record. The project will also be financed by Japan Bank for International Cooperation and four Thai banks.
Laos has a hydropower potential of 20,000 megawatts from its river networks and is strategically located to become the ‘battery’ of the Greater Mekong Subregion.
The bulk of the hydropower generated by Nam Ngiep 1 will be delivered to neighbouring Thailand, which relies heavily on its dwindling natural gas reserves.
With the use of hydropower, it is expected that around 500,000 tonnes of carbon dioxide emissions can be avoided in Thailand every year.
“The project is a win-win for Laos and Thailand. It will generate revenues for Lao’s economic and social development, and provide Thailand with cost-efficient power,” Kurumi Fukaya, Lead Investment Specialist at ADB’s Private Sector Operations Department said as quoted in a press release from the bank.
Aside from the exported power, the project to start operations in 2010 will likewise supply power domestically and raise the nation’s household electrification rate.
The project will be constructed by the Nam Ngiep 1 Power Company (NNP1PC), jointly owned by Kansai Electric Power of Japan, EGAT International of Thailand and the government of Laos. Kansai is the second largest power utility in Japan, while EGAT International is an international arm of Electricity Generating Authority of Thailand, the buyer of the electricity.
The project will be constructed on the Nam Ngiep River in the provinces of Xaysomboun and Borikhamxay of Laos. It consists of a main power station, a reservoir of 67 square kilometres, a re-regulation power station and a 125-kilometre transmission line to connect the main power station to the Nabong substation near the city centre of Vientiane.
NNP1PC had engaged with communities affected by the project in the preparation of environmental and social safeguard plans.
Based on these consultations, the plans were drafted to responsibly resettle the project affected people with livelihood restoration and social development support and to conserve biodiversity. The project has incorporated best international safeguard practices in mitigating impacts on the people and environment.
vientiane times
