Govt, investor ink concession deal to develop 124 MW hydropower project

The Lao government on Wednesday signed a concession agreement with an investor to develop a 124 MW hydropower project, boosting the country’s efforts to promote clean energy consumption and export to countries in the region.

Dr Sthabandith Insisiengmay (right) and Mr Sounthone Sabandith shake hands after signing the agreement.

The Deputy Minister of Planning and Investment, Dr Sthabandith Insisiengmay, and the Managing Director of Nam Neun 1 Hydropower Sole Co Ltd, Mr Sounthone Sabandith, inked the deal in Vientiane to push forward the Nam Neun 1 Hydropower project in Xieng Khuang and Huaphan provinces.
Those present at the signing ceremony included Xieng Khuang province’s Governor Mr Bounchanh Sivongphanh, the Deputy Minister of Energy and Mines, Mr Chanthaboun Soukaloun, the Deputy Governor of Huaphan, Mr Phonsouk Inthavong, and senior representatives from both sides.
The construction of the US$360.6-million project is expected to be completed in the next four or five years, with commercial operations set for 2028. Once it is operational, the project will increase the country’s hydroelectric power generation capacity and boost energy exports.
Power from the project, which is expected to generate 576 GWh annually, will be sold to neighbouring Vietnam.
The project’s manager, Mr Soulideth Baomanikhot, said at the event where the agreement was signed that a 33-km transmission line of 110kV will connect the hydropower plant to Nam Yeuang hydropower plant’s power station, from where a 220-kV transmission line will transfer power further across the Lao-Vietnamese border toward Nong Cong power station inside Vietnam.
According to the manager, the project is expected to generate as much as US$91.2 million in loyalty fee and profit tax to the state during the concession period.

Mr Soulideth Baomanikhot addresses the signing ceremony.

In addition, the government will earn income from profit tax charged from construction contractors along with labour tax.  
Mr Soulideth highlighted that the project will have a significant impact on the local community, creating jobs and stimulating local economic growth. It will also help to improve infrastructure such as roads, electricity transmission lines, and clean water supply.
“After the concession period is over, the project will be transferred to the government,” he said, assuring the gathering that the plant will be able to operate for tens of years.
The manager said his project has attached great importance to reforestation to offset loss of trees due to the plant and its water catchment area, and that the developer has allocated funds to finance reforestation.
The project’s reforestation, he said, will not only offset the forest loss, but bolster the government’s efforts to increase forest cover to 70 percent of the country’s total area.
The Lao government granted a green light to Indo China Consulting Co Ltd in 2009, through a memorandum of understanding, to carry out a feasibility study for the project. Five years later, the project development agreement (PDA) was signed. The right to develop the project was transferred to several companies, before being taken over by Nam Neun 1 Hydropower Sole Co Ltd, a subsidiary of ST Group.
This project will contribute to the Lao government’s green growth strategy and its goal of becoming a clean-energy battery for countries in the region.

ByAdvertorial Desk
 (Latest Update June 21, 2024)