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Chinese bank funds Lao hydropower plants
Publication Date : 27-09-2013
China Development Bank (CDB) is committed to providing loans for hydropower development on the Nam Ou river in northern Laos after signing a loan agreement with representatives from Sinohydro and Electricite du Laos (EDL) in Beijing on Thursday, during President Choummaly Sayasone's official goodwill visit to China.
According to a press release from Nam Ou River Basin Hydropower Co.,Ltd, the loans amount to about US$660 million. They will finance construction of the Nam Ou 2, 5 and 6 hydropower project located in Luang Prabang and Phongsaly provinces under the first phase of the river basin development project.
According to the plan and agreements between the Lao government and the developers, seven hydropower plants will be developed in the build-operate-transfer model on the Nam Ou, generating about 5 billion kWh a year with a production capacity of 1,156MW.
“The electricity will be sold to EDL for domestic consumption and export to neighbouring countries,” said a senior EDL official.
“Three dams will be built initially and will start generating about 2 billion kWh per year from 2016, with the remaining amount to depend on the demand for electricity in Laos.” EDL, on behalf of the Lao government, holds 15 per cent of shares while Sinohydro holds 85 per cent.
Sinohydro Resources Ltd Managing Director, Shen Decai, said “We are very pleased to sign this loan agreement.
With a well-established presence in the hydropower and infrastructure sector in both China and abroad and with support from the Lao government and financial institutions, Sinohydro will continue to work to provide affordable and renewable energy for Laos that will yield economic and environmental benefits for the people of the region. ”
Civil works on the three dams began last year after a concession agreement and power purchase agreement were signed, witnessed by high ranking officials from Laos and China. The first batch of loans will be granted soon after the Lao National Assembly approves the project.