Russian investor to start southern hydro projects

A Russian company expects to spend more than 6.8 trillion kip (about US$790 million) on two hydropower projects in two southern provinces of Laos.

Mr Oleg Kabardin ( left ) shakes hands with Deputy Minister of Planning and Investment Thongmy Phomvixay after exchanging agreements. --Photo Khamphanh

These will be the Nam Kong 1 plant in Attapeu province and the Xekong 4 plant in Xekong province.

“We hope to start building these plants next year,” General Director of Region Oil LLC, Mr Oleg Kabardin, said at a signing ceremony in Vientiane on Monday.

Region Oil LLC signed project development agreements (PDAs) with the Ministry of Planning and Investment in Vientiane at a ceremony attended by Deputy Prime Minister Dr Thongloun Sisoulith.

The Nam Kong 1 plant will have a dam wall 85.3 metres high and 386 metres long and will have an energy generation capacity of 469 GWh per year.

Investment in the plant will be 1.4 to 1.6 trillion kip (US$168 to US$186 million), according to a press release from the ministry.

The Xekong 4 dam wall will be 169 metres high and 1,027 metres long and the plant will be able to generate 1,901GWh per year.

The investment cost of this project will be about 5.3 trillion kip (US$604 million), according to the press release.

Both projects are currently governed by the PDA, which allows the investor to spend 18 months conducting additional surveys to obtain more details.

During this period the investor is required to revise previous studies, including the feasibility study and the environmental and social impact studies.

The investor will also discuss the power purchase price during this time and will make a purchase agreement with Electricite du Laos (EDL).

When these components are completed, the project will move forward to concession and shareholder agreements between the investor and the Lao government.

The investor will own the projects for 30 years after signing the concession agreement. The Lao government will hold a 20 percent investment share and the rest will belong to the investor.

Mr Oleg said the company had prepared a draft concession agreement for the government to sign and a draft power purchase agreement for EDL. Other drafts have been prepared for the purchase of electricity by Vietnam and Thailand .

The company is currently working on the design and technical systems of the two plants.

Region Oil LLC signed a memorandum of understanding with the Lao government several years ago to start studies on four hydropower projects, Nam Kong 1 and 3 and Xekong 5 and Xekong 4.

The company worked with Lao and Norwegian firms on the basic study for the Xekong 5 project. This study and a feasibility study have both been completed.

“We will have further discussions with the Lao government about the Nam Kong 3 project,” Mr Oleg said.

By vientiane times
(Latest Update June 25, 2008)

Malaysia signs on hydro plant

Rohas Euco Industries Bhd of Malaysia expects to spend about 870 billion kip (US$100 million) to construct the Nam Sane 3 hydropower project in Xieng Khuang province.

“The project will be a shared investment, with the Lao government contributing 25 percent and the investor 75 percent,” according to a press release from the Ministry of Planning and Investment.

The ministry signed a Project Development Agreement (PDA) with the investor in Vientiane last Thursday.

The PDA will allow the investor to spend 18 months conducting additional surveys to obtain more details about the project, which is planned for Mokmay district.

An official from the Energy Promotion and Development Department said during the PDA period the investor would have to revise previous studies, including the feasibility study and the environmental and social impact study.

“The investor will also have to discuss the power purchase price during this time,” the official said.

When those components are completed, the project will move forward to other agreements such as concession and shareholder agreements between the investor and the Lao government.

A power purchase agreement will also be made between Electricite du Laos (EDL) and the investor.

The dam will be about 75 metres high and 400 metres long. It is expected to generate 300 to 350 GWh of electricity per year, which will be sold to EDL for domestic consumption and export.

The project will be run by the investor for a 30 year period after the concession agreement is signed, according to the press release.

The PDA was signed after the investor completed a previous study that had been conducted after the signing of a memorandum of understanding with the ministry in June 2006.

Last week the Lao government signed an additional minute of understanding with a Vietnamese investor for a 3 trillion kip (US$332 million) investment in the Xekaman 4 hydropower project in Xekong province. This is scheduled to start in 2009 and is set to generate electricity in 2013 for export to Vietnam .

Laos currently has 11 major hydropower plants in operation and at least 36 smaller ones. These generate energy for both domestic and export markets and have a combined installed capacity of more than 670MW. The 36 smaller hydropower plants are all government investments.

These plants generate approximately 3.5 billion kWh per year, of which about 2.2 billion kWh is exported to Thailand .


By Phonsavanh Vongsay
(Latest Update June 23, 2008)

Supplements to MOU Sekaman 4 hydropower signed

(KPL) Supplements to a Memorandum of Understanding on a group of Vietnamese-invested hydro-power projects in Laos were signed in Vientiane Capital on June 16.
The signatories were Lao Deputy Minister of Planning and Investment Thongmy Phomvisay, and President of the Managerial Board of the Viet-Laos Power Joint-stock Company, Mai Huy Tuan. The signed accord on the group of Sekaman hydro-power projects No. 4 has developed from the former Sekaman 4 project signed with the Lao government in December 2006.
The projects will be based in Dakchueng district, Sekong province with a capacity of 200MW and an annual output of 900 million kWh.
They are scheduled to start construction in 2009 and begin operating in 2013. The Viet-Laos Power Joint-stock Company has signed contracts to conduct a feasibility study and invest in a number of hydro-power projects in Laos, including Sekaman 1, Sekaman 3 and Sekaman 4, with a gross capacity of 1,000MW and an annual output of over 4 billion kWh.
Once these projects are put into operation, the Viet-Laos company will export electricity to Vietnam

Study for Huaphan hydropower plant behind schedule

Construction of the Nam Sim hydropower project in Huaphan province was set to begin earlier this year, but this has not been possible because the feasibility study is not yet complete.

“We can't say when construction will begin because the investors are working slowly,” an official from the Contract Negotiation and Management Division of the Energy Promotion and Development Department said recently.

Work cannot begin on the small-scale hydropower plant until the study is complete. Norwegian investors signed a project development agreement with the government last year.

“The investors are working on additional surveys to obtain more details about the project,” the official said.

The agreement for the project was signed between Norpower AS Company and the Ministry of Planning and Investment last October.

The company began researching the project in 2003, carrying out an initial feasibility study and engineering survey and analysing potential environmental impacts before submitting the findings to the government in 2006 for approval.

“The investors are also preparing some documents and seeking a bank loan to help finance the project,” the official said.

The hydropower plant, to be built in Viengxay district, will cost about 138 billion kip (US$14.4 million). The government will hold a 25 percent investment share.

The investors estimate it will take two years to build the plant, which will have an installed capacity of 7.8MW and will generate electricity for local supply.

The company will operate the plant for 25 years after construction, and sell the electricity generated to Electricite du Laos (EDL) for use in the province.

“The company has not yet signed a purchase agreement with EDL,” the official said.

The hydropower plant will reduce the need for the purchase of electricity from Vietnam , and will help to develop the province's infrastructure and economy.

According to the Ministry of Energy and Mines' 2007 annual report, Laos imported 475.9 million kWh from Thailand , China and Vietnam last year.

The government is currently promoting the rapid development of small and medium power plants for local supply to reduce the need for imported electricity.

These plants will have installed capacities ranging from 2 to 100MW.

Other small hydropower plants planned are on the Nam Nhone in Tonpheung district, Bokeo province, the Nam Ham in Botaen district, Xayaboury province, Tadslen in Xepon district, Savannakhet province, and Xelanong 2 in Ta-oy district, Saravan province.

Laos currently has a combined installed capacity of about 670MW from 11 major and 36 smaller and medium hydropower plants, which generate energy for both domestic and export markets.

These plants generate approximately 3.5 billion kWh per year, of which about 2.2 billion kWh is exported to Thailand.

By Phonsavanh Vongsay
(Latest Update June 19, 2008)

Laos, Vietnam ink supplements to major hydro-power project

(KPL) Supplements to a Memorandum of Understanding on a group of Vietnamese-invested hydro-power projects in Laos were signed in Laos ' capital Vientiane on June 16.
Signatories were Lao Deputy Minister of Planning and Investment Thongmy Phomvisay and President of the Managerial Board of the Viet-Laos Power Joint-stock Company, Mai Huy Tuan.
The freshly-signed accord on the group of Sekaman hydro-power projects No. 4 has developed from the former Sekaman 4 project signed with the Lao government in December 2006.
The projects will be based in Dakcheung district, Sekong province with a capacity of 200MW and an annual output of 900 million kWh.
They are scheduled to start construction in 2009 and begin operating in 2013.
The Viet-Laos Power Joint-stock Company has signed contracts to conduct a feasibility study and invest in a number of hydro-power projects in Laos , including Sekaman 1, Sekaman 3 and Sekaman 4, with a gross capacity of 1,000MW and an annual output of over 4 billion kWh.
Once these projects are put into operation, the Viet-Laos company will export electricity to Vietnam

Deforestation impacts hydropower potential

Deforestation could negatively impact hydropower projects, according to the National Land Management Authority president.

Speaking at a press conference in Vientiane yesterday, Mr Kham-ouan Boupha said levels of deforestation in Laos were already back to those of 1989, when 47 percent of Laos was covered in forest.

The current situation was even more worrisome, because this figure had further reduced, he said.

“In 1989 we should have held up a red light to logging, but now the problem has got even worse,” he said.

“If we faced a red light then, I don't know what colour light we're facing now.”

Mr Kham-ouan maintains he has seen satellite images which back up his claim.

He said if Laos 's forests continued to disappear, it would damage the potential of local hydropower projects.

If deforestation occurs in a reservoir's catchment area this contributes to soil erosion. Soil then fills the reservoir and reduces the life of the hydropower project.

Mr Kham-ouan said he knew of several hydropower dams that had failed to meet production targets for this reason, including Houayho in southern Laos and Nam Mang in Borikhamxay province.

“Another dam in Luang Namtha province has insufficient water for electricity production because people cleared forests for rubber tree plantations,” he said.

Mr Kham-ouan said illegal logging and slash and burn cultivation were contributing to forest decline.

He said deforestation also contributed to changing weather patterns and the increasing frequency of floods and droughts in Laos during the past two years.

In order to encourage reforestation and protect Laos 's capacity for hydropower, Mr Kham-ouan has called on officials from relevant sectors to strictly enforce current laws to ensure illegal logging is eradicated.

Another challenge in preserving forests is instances of villagers taking ownership of state land without permission, including forest areas, and clearing the land for farming.

This problem could be addressed if villagers were given land titles and legal rights to land, and these land titles were enforced to prevent forested land from being damaged.

Foreign investment must also preserve the environment while ensuring local people benefit.

In addition to deforestation, this was also important for poverty reduction, he said.

Mr Kham-ouan found many investment projects had implemented a “1+4” policy by employing villagers to work as labourers.

He said this was not a good way to reduce poverty.

“One man I met in Xayaboury province earns about 50 million kip per year from farming his land on his own. In contrast, labourers earn only 20,000 to 25,000 kip a day.” By these calculations, if a labourer worked every day of the year he would only earn about 9 million kip.

The government's policy is encouraging investors to implement the “2 + 3” policy to ensure investment is beneficial to investors and local people, as well as to the country in general.

Under this policy, investors must provide funding, technical training and a ready market, while villagers provide their land and labour.

By Somsack Pongkhao
(Latest Update June 6, 2008)
http://www.vientianetimes.org.la/

Bokeo hydropower plant on track

Construction of the Nam Nhone hydropower project, a small-scale power plant to be located in Bokeo province, will start later this year.
“The main components are the powerhouse and dam and we will begin work after the wet season,” said an official from the Contract Negotiation and Management Division of the Energy Promotion and Development Department, in an interview on Friday.
The hydropower plant, located in Tonpheugn district, will cost about 39 billion kip (US$4.5 million) to build. It is an investment between two businesses from Hong Kong with a shareholding of 70 percent, and a Lao investor.
Land is being cleared at the site to build the powerhouse and an access road.
A 22kV transmission line will be installed to bring electricity to the site. This will be 6km long and cost about 960 million kip (US$100,000).
“The plant is expected to be finished by the end of next year and energy generation should start in early 2010,” the official said.
The hydropower plant will have an installation capacity of 2.4 megawatts and a forecasted annual production of about 10.4GWh. The electricity will be sold to Electricite du Laos (EDL) for supply to Bokeo consumers.
The investors and EDL signed two agreements for energy purchase in February and a concession agreement in March 2006 following a feasibility study in 2005.
“This project won't affect the environment or local people because there won't be a large reservoir; there will be no population resettlement,” the official said.
Instead of a dam, the project will operate using a weir to raise the water level at the intake. As the water reservoir is small and will flood a very limited area, no homes or farmland land will be flooded, and the plant will not significantly change the water flow in the river.
It is expected the plant will contribute to the development of industrial activities in the province, creating jobs and stimulating the local economy with a fishing basin.
New infrastructure such as a road and a bridge will improve access to farmland, and the project will directly contribute to the electrification of local villages.
“The government is promoting the development of small-scale power plants and Nam Nhone is a model example of a private small-scale investment,” the official said.
The government considers this project important because it will be the only local energy source for Bokeo province, and may replace Thai electricity imports.
The government is urging the building of small and medium power plants for local supply to reduce the need for power imports. These plants will have installation capacities ranging from 2 to 100 megawatts.
Other small hydro plants planned for construction are on the Nam Ham in Botaen district, Xayaboury province, Tadslen in Xepon district, Savannakhet province, and the Nam Sim in Viengxay district, Huaphan province.
Laos currently has 11 major hydropower plants and at least 36 smaller projects. These generate energy for both domestic and export markets and have a combined installation capacity of more than 670 megawatts. The 36 smaller hydropower plants are government investments.

By VIENTIANE TIMES (Latest Update June 2, 2008)