Wednesday, April 13, 2011

Chinese firm to build seven power plants on Nam Ou

Chinese firm to build seven power plants on Nam Ou
Vientiane Times

A Chinese company plans to build seven hydropower plants along the Nam
Ou River, one of the largest tributaries of the Mekong.

Deputy Minister of Planning and Investment Thongmy Phomvixay and
Sinohydro Ltd Deputy Managing Director Sen De Cai signed a master plan
for the Nam Ou hydropower development project on Monday.

Under the plan, Sinohydro will build two major reservoirs and seven
hydropower plants along the 475 km Nam Ou River. The river rises in
China and runs through Phongsaly province before entering the Mekong
River at Pak Ou in Luang Prabang province.

Once completed, the seven power stations will have a total production
capacity of 1156MW, generating 5 billion kilowatt hours a year. The
power will be sold to Electricite du Laos for domestic consumption -
specifically in the north of the country - and to Thailand, Vietnam and

Sinohydro will initially build three power plants along the Nam Ou
River. The construction of the remaining power plants will depend on the
demand for electricity in Laos.

According to a senior official from the Ministry of Planning and
Investment's Investment Promotion Department, Sinohydro will use the
master plan as a framework for signing agreements with the government to
develop power plants in the future.

Sinohydro cannot build all seven power stations at the same time due to
the high construction cost and low demand for electricity. The Lao
government is required to sign the master plan so the company can begin
development along the Nam Ou River.

Sinohydro says it is negotiating a concession agreement with the Lao
government and hopes to finalise the document by the middle of this
year. The company also says it expects to sign a finance agreement with
Electricite du Laos and China Development Bank this month.

The developer signed the project agreement with the Lao government in
2007 and renewed it in early 2010. The company presented a project
feasibility report to the government at the end of 2010.

According to the feasibility study, the Nam Ou will be able to supply
enough water to power the plants as it runs through mountainous forested
areas and valleys and has 11 major tributaries. Warm moist air from the
Bay of Bengal and the South China Sea also bring much rainfall to the
river area.

By Ekaphone Phouthonesy
(Latest Update April 13, 2011)

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