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Sunday, April 20, 2008

Nam Theun 2 reservoir begins to fill

The Nam Theun 2 (NT2) hydropower project has began the impoundment process, meaning the storing of water, with the sealing of the diversion tunnel that will cause dam water levels to rise and ultimately fill the reservoir.

“From now on, water will begin to fill the Nakai reservoir, but a small flow will be released downstream for fisheries and environmental purposes,” said the Chief Executive Officer of Nam Theun 2 Power Company Limited, Mr Jean Pierre Katz, at a ceremony last Thursday to mark the closure of the diversion tunnel.

The ceremony was held at the Nakai dam site in Khamkeuth district, Borikhamxay province, in the presence of Standing Deputy Prime Minister Somsavat Lengsavad.

The closure of the tunnel will result in 80 sq km of land being flooded.

“The tunnel closure is the first step in the reservoir impoundment process, before the dam gates are closed in June,” said Minister of Energy and Mines Bosaikham Vongdara.

The tunnel was built to divert the Theun River around the dam site during construction. Water will now be released through the dam gates.

Mr Bosaikham said the independent Panel of Experts on Environment (POE) had been monitoring and assessing project implementation so far and had approved the closure of the diversion channel.

The POE has been monitoring the project since 1997. They have constantly referred to the concession agreement that underpins the project, highlighting the importance of this accord in achieving the desired social and environmental outcomes of the venture.

“This step of closing the tunnel occurs towards the final phase of the project, and shows the venture is well on track,” said the Deputy Director General of the Energy Promotion and Development Department, Mr Sychath Boutsakitirath.

Project construction began in mid 2005, and is now 85 percent complete.

Mr Bosaikham said trial electricity production would begin in March next year and official commercial operations would begin by the end of 2009.

Investment in the project is worth more than 11.8 trillion kip (US$1.2 billion). The plant will have an installed capacity of 1,070MW with six generators for electricity supply to both local and export markets. Thailand will buy 995MW of electricity, and 75MW will be used for domestic consumption.

The hydropower plant is a joint venture between the Lao government, which holds a 25 percent shareholding, and foreign investors from Thailand and France who hold the remaining 75 percent. Financing involved 26 international banks including the World Bank, Asian Development Bank, European Investment Bank and Agence Francaise de Developpement.

“After completion, the plant will contribute about US$80 million per year to the national budget over the 25 year concession period,” Mr Bosaikham said.

NT2 will bring about indirect benefits to local communities through socio-economic development projects such as infrastructure installation including roads, schools, hospitals and other public facilities. The project will also provide local communities with electricity and clean drinking water.

By Vientiane Times
(Latest Update April 18, 2008)

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