The Japan Bank for International Cooperation signed on September 3 a loan agreement totaling up to US$34.5 million with the Government of Lao PDR to enable the government to invest in Nam Ngiep 1 Power Company Limited (NNP1) through Lao Holding State Enterprise (LHSE), a state enterprise owned by the Government of Lao PDR. The loan will finance portion of equity the state had to add to the project.
The project will be constructed by the Nam Ngiep 1 Power Company (NNP1PC), jointly owned by Kansai Electric Power of Japan (45%), EGAT International of Thailand (30%), and the Government of the Lao PDR (25%).
The project will be constructed on the Nam Ngiep River in the provinces of Xaysomboun and Bolikhamxay in the Lao PDR. It consists of a main power station, a reservoir of 67 square kilometers, a re-regulation power station, and a 125-kilometer transmission line to connect the main power station to the Nabong substation near the capital Vientiane.
In this Project, NNP1 will build, own, and operate a dam-type hydro power plant with the total capacity of 290 MW. Most of electricity produced is going to be sold to EGAT and also some to Electricite du Laos, a Laotian state-owned corporation, for 27 years. This is a cross border project within the ASEAN region where the economic growth is remarkable.
The total cost of the project is estimated to be around US$900 million.
The Lao PDR 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.
In late August we reported that the project had achieved financial closure. On 15 August 2014, ADB signed financing agreements for an assistance package consisting of a $50 million direct loan, a Bt3.04 billion (equivalent of around $95 million) baht-denominated loan, and a B loan of $72 million for the project.
The 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 ($200 million) and four Thai banks, Bangkok Bank, Export-Import Bank of Thailand, Kasikornbank and Siam Commercial Bank.