The largest hydropower plant in Laos is expected to begin commercial operation next month, according to a senior official from the Ministry of Energy and Mines.

Energy Promotion and Development Department Deputy Director General, Mr Sychad Bounsakittilath, said technical problems at the Nam Theun 2 hydropower plant had been solved and the plant was now ready to generate electricity for export.

“The technical problems have been solved and we are waiting to finalise the paperwork,” he said, adding that the Lao government had given the green light for the power plant to start commercial operation.

He said commercial operation was expected to begin at the end of March.

Construction of the US$1.2 billion hydropower plant began in 2005. It was scheduled to begin delivering power to the Lao grid and for export to Thailand in December 2009. However, technical problems caused commercial operation to be postponed

Mr Sychad said the power plant would generate a large amount of revenue for Laos , injecting hundreds of millions of dollars a year into the Lao economy, enabling the government to ensure sustainable development and eliminate poverty in Laos .

According to a report from the Nam Theun 2 Power Company, the hydropower plant is expected to generate average annual revenues of US$80 million for Laos in the form of taxes, royalty fees and dividends over the 25-year life of the concession. Over the period of operation income revenues will amount to more than US$2 billion.

The Lao government has made a firm commitment to spending the revenue from the hydropower plant on poverty elimination.

At present the World Bank, other multilateral institutions and the Lao government, who shared the construction costs, are working together to ensure that revenues from the power plant will effectively serve the long-term development of Laos. The income from the power plant will enable the Lao government to pursue its poverty alleviation goals for the country and help bring much-needed investment in areas such as education, health and infrastructure development.

Shareholders of the Nam Theun 2 hydropower plant are Electricité de France (35 percent), the Lao Holding State Enterprise owned by the Lao government (25 percent), the Electricity Generating Public Company of Thailand (25 percent), and the Italian-Thai Development Public Company of Thailand (15 percent).

The investment in the power plant's construction was made in the format of a build-operate-transfer project, under which the shareholders will operate the facility for 25 years, and then transfer it to the Lao government.

Mr Sychad said the project developers planned to train Lao staff to replace foreign workers in managing the company and power plant in the future. The move will enable the Lao government to operate the plant after 25 years.