Ceremony Breaks Ground for Xieng Khuang Dam

December 26, 2011

Vientiane Times

Xieng Khuang province: Construction of a large hydropower plant, the Nam Ngiep 2, officially began here on Friday after three years of preparation by a Chinese investor.

The groundbreaking ceremony was attended by Deputy Prime Minister Somsavat Lengsavad, officials from ministries and the Chinese embassy to Laos, and staff from companies and businesses.

“The project involves a total investment of 2.7 trillion kip (US$345 million),” President of the China International Water & Electric

Corporation (CWE), Mr Wang Yu, said at the groundbreaking ceremony.

CWE and Electricite du Laos (EDL) jointly formed the Nam Ngiep 2 Power Company Limited to take responsibility for project management and operation.

“CWE holds a 90 percent share in the company and EDL holds a 10 percent stake,” Mr Wang Yu said.

It is expected to take 51 months to build the hydropower plant in Phaxay and Khoun districts. “We expect construction to be complete and commercial operation of the plant to start in 2015,” Mr Wang Yu said.

Speaking at the groundbreaking ceremony, EDL Managing Director Mr Sisavath Thiravong said the dam will have installed capacity of 180MW and will generate 723 million kWh per year. EDL will buy all the electricity generated to feed into the national power grid for local supply.

“It will earn revenue of about 348 billion kip (US$43.38 million) per year,” he said. Energy and Mines Minister Mr Soulivong Daravong said previous energy development projects had been mainly carried out by foreign companies and the energy generated was sold to other countries. But now the demand for energy in Laos is increasing, and there is a growing need for electricity in local areas. “The Nam Ngiep 2 project will mainly supply provinces in the north-east because this region still doesn’t have enough electricity,” Mr Soulivong said.

Xieng Khuang provincial Deputy Governor Mr Khampiene Sinuanethong said that at present only 62 percent of all households have access to electricity.

The province has great potential for hydropower development, with the Nam Ngum 4, Nam Ngum 5, Nam Pot, Nam Seum, Nam Ngiep 2, Nam Ngiep 3, Nam Thea and Nam Nyuan dams planned.

“Once these dams are built they will have installed capacity of 1,000MW,” Mr Khampiene said.

The main objectives of the Nam Ngiep 2 project are to generate electricity and provide benefits in the areas of flood control, irrigation, irrigation, transportation and tourism, which will promote local social and economic development.

Mr Wang Yu said CWE signed a memorandum of understanding in December 2008 and a project development agreement in August 2010 with the Lao government.

This year the company signed a shareholder agreement with EDL in June, and a concession agreement with the Lao government in August. (The concession period is 25 years, starting from the date of commercial operation). CWE also signed a power purchase agreement with EDL in October.

CWE entered the Lao hydropower market in 1996 and invested in the Nam Leuk, Nam Mang 3 and Nam Lik 1-2 dams. It also invested in the installation of power transmission lines and substation construction.

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