EIA: Lao PDR - Asian Development Bank

CHAPTER 2
PROJECT DESCRIPTION
2.1 PROJECT BACKGROUND
The Lao PDR expects that its hydropower resources are to be a primary source of income for
the future, selling electricity to Thailand and other neighbors. The foreign exchange earned
from sale of hydropower will in turn spur other economic and social development in the Lao
PDR, while the electric network will be a key infrastructure for that development. Thailand
has considerable demand for electricity, with domestic supply unable to keep up w ith the
growing demand. Most of the alternatives available to Thailand for additional large-scale
electrical production in country are much more costly than hydropower, both financially and
environmentally.
For the NNHP-1, several pre-feasibility studies have been done. The JICA-F/S which has
been done in 2000 a nd 2002 w as implemented environmental impact assessments and
technical feasibility studies. The JICA-F/S stated that the Nam Ngiep1 project has been
planned to help cope with peaks or intermediate peaks in the load curve. It can maintain price
competitiveness among other power sources.
NNHP-1 has been planned as a Build-Operate-Transfer (BOT) project by a private/public
company, targeted to sell electricity to EGAT and the Lao PDR government-owned EdL for
27 years. This is to be done under a concession provided by the Government of Laos (GOL)
and Power Purchase Agreements with EGAT and EdL.
A company, in future to be named the Nam Ngiep1 Power Co., Ltd., will be established
under a shareholder agreement in order to sign loan agreements with lenders and start work
on the project. The sponsors of the Nam Ngiep1 Power Co., Ltd., are a consortium consisting
of The Kansai Electric Power Co., Inc. from Japan, EGAT International Co., Ltd. from
Thailand, and Lao Holding State Enterprise (LHSE) from the Lao PDR. Detailed designs,
construction plans, commissioning, operations and maintenance are all among the objectives
of the company. The company is expected to repay its loans and recover its investment from