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)

Xekong 4, Namkong 1 hydropower projects move forward

Developers of the Xekong 4 hydropower project in Xekong province and the Namkong 1 hydropower project in Attapeu province presented the results of feasibility studies in Vientiane yesterday.
Under Memorandums of Understanding drawn up on December 22, 2005, and on March 3, 2006, the government had given permission to Region Hydro Power Stations Lao Co Ltd from Russia to conduct feasibility studies of the two projects, in support of the country's socio-economic development plan.
Speaking at the opening ceremony of a seminar to discuss the projects, the Director of the Promotion and Development Department for Energy and Mines of the Ministry of Energy and Mines, Mr Xaypaseuth Phomsoupha, said the objective was to produce electricity for export to Thailand and Vietnam .
The projects also implement the Lao government's Memorandum of Understanding to supply 7,000 MW to Thailand and 3,000 MW to Vietnam by 2020.
The Xekong 4 hydropower plant, with an installed capacity of 60 0 MW, will produce 2,118 kwh of power per year, while the 150 MW Namkong 1 will generate 563 kwh a year.
The General Manger of Region Oil, the parent company of Region Hydro Power Stations Lao Co Ltd, Mr Olek Karbadin, said the feasibility studies could not be conducted without the cooperation of the authorities at all levels in Vientiane and in the provinces.
He added that the Russian government was closely monitoring the progress of these projects.
According to the feasibility study, about 170 square km will be flooded when the Xekong 4 dam is built. Most of this area contains unused forest and agricultural land that has been destroyed by slash and burn cultivation, logging exploration and animal hunting.
Around 4,500 people from 18 villages in Kaleum district are expected to be relocated from the Xekong 4 project site.
The Namkong 1 project in Attapeu province will cover 21.8 square km of land of similar condition to that being used by the Xekong 4 project.
While no families will be relocated from the construction area, four communities with a population of 1,612 from 385 families will be impacted, as they live to the rear of the dam site. The deputy governors of Xekong and Attapeu provinces agree that, overall, the hydropower projects will improve the living conditions of local communities over time, and will contribute to the country's poverty alleviation strategy.

By XAYXANA LEUKAI (Latest Update Janurary 23, 2008)

Hydropower projects under consideration

Planned hydropower plants on the Xekong and Nam Kong Rivers.

The Region Hydropower Stations Lao Co. Ltd.
will present the findings from a feasibility study of two proposed hydropower projects next week in Vientiane , according to the latest progress report released by the company last week.

The two projects assessed by the study were the Xekong 4 project in Xekong province, and the Namkong 1 project in Attapeu province.

“Once the presentation is completed, the company will begin construction of the access roads to the projects sites,” the report stated.

The company has completed the design plans for the access roads, and initial permission for the projects has been granted by the Lao government sectors concerned.

“The company hopes to enter into a project development agreement with the Lao government next month,” the report asserted.

Once the agreement is reached, the company will establish a joint venture with the Lao government.

With the formal procedures completed, the company hopes to begin excavation on both sites in October this year, and expects to complete the dams and begin energy generation by the end of 2013.

The company has completed surveys of existing electricity transmission lines, and reported its findings to the Lao energy sector. New power lines will be necessary to carry the electricity generated by the powerhouses to the Ban Sok substation in Attapeu province.

An initial agreement for the purchase of electricity has been obtained from an unnamed buyer. Further discussion and cooperation with the government is necessary before a more detailed purchase agreement is reached, to be entered into once the feasibility findings are released.

The Region Hydropower Stations Lao Co. Ltd. was first established in Vientiane by Russia 's Region Oil Company in 2007, after it signed Memorandums of Understanding with the government for four proposed hydropower projects, namely Xekong 4 and 5, and Namkong 1 and 3 in Xekong and Attapeu provinces.

The four projects will have a combined installation capacity of 1,200MW, with total investment estimated at around 15.7 trillion kip (US$1.7 billion).

“So far the company has spent about 92.7 billion kip (US$10 million),” the report noted.

Total capacity will include the generation of 150MW of energy at the Namkong 1 hydropower plant, Xekong 4 will have an installed capacity of around 600MW, with 35MW generated by Namkong 3 and the remainder produced by Xekong 5.

The projects are expected to export energy to Vietnam or Thailand .

The report also noted changes to the road access leading to the Xekong 5 construction site.

Access is now being reassessed because the initial design for the road passed through protected forest reserves.

The results from this new survey will be presented to the government upon completion.

The company last year established an office based in Xekong to better administer the projects. Agreements with companies from Laos , Russia , Norway , and Vietnam have been reached for the completion of project surveys, construction designs, and consultation processes, as well as for environmental and social impact studies.

Close cooperation with government agencies has also been vital for the disposal of unexploded ordnance found at the project sites, and for conducting accurate studies of water, land and climate impacts.

To date, environmental impact assessments for Xekong 4 and Namkong 1 have been completed and the findings presented to the government sectors concerned.

By Phonsavanh Vongsay
(Latest Update Janurary 16, 2008)

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