“The project may be 45 or 100 megawatts (MW),” said company Vice President Vilay Soulatha during an interview at the signing ceremony.
The agreement allows the company to conduct further feasibility studies aimed at determining whether the Nam Phak hydropower project is viable.
The project site is located in Pakxong and Pathoumphon districts. Survey work has begun with an initial forecast size of 45MW.
Further surveys are required to determine the extent of water resources and design requirements as well as environmental and social impacts before a final determination of project size can be made.
The investor signed a memorandum of understanding (MOU) with the Lao government for a pre-feasibility study in 2007. The initial study showed the project may cost about 847 billion kip (US$100 million) with a size of 45MW.
“However, we now see it may be a larger project, up to 100MW, if expansion is possible. This would mean an investment cost of about 1.5 trillion to 1.7 trillion kip (US$180 million to US$200 million), Mr Vilay said.
“But we will have to wait for additional study results.”
The PDA will need to run for about 18 months to complete the feasibility study. But the investor believes the study may be done sooner than that because “we have already completed studies on the environment, local community, financing, techniques, economy and possibilities,” he said .
Following the PDA the investor will sign a concession agreement with the government, after which the project can operate for 30 years, including the construction period.
The project will be a joint investment with the Lao government holding 20 percent and Kobe Green Power Co Ltd holding an 80 percent share.
Demand for electricity has been increasing in the south of Laos and a number of hydropower projects are being developed. The Nam Phak project expects to supply domestic power needs as well as provide power for export.
Investment in the sector is increasing both in quantitative and qualitative terms. Today, there are 75 hydroelectricity projects, according to Energy and Mines Deputy Minister Somboun Rasasombath in his address at the recent 9th Annual Round Table Implementation Meeting on Official Development Assistance and Development in Laos .
Ten projects are already in operation, 41 more have signed MOUs, 16 have signed development contracts and eight projects have signed construction contracts.
Seven projects have approaching deadlines for completion.
These include the Nam Theun 2, with construction complete and electricity generation soon to follow; Nam Ngum 2, with construction 80 percent complete; Xekhaman 3 with construction 56 percent complete; Xeset 2 which is built and operational; and Nam Lik 1 and 2 and Nam Ngum 5.
By Phonsavanh Vongsay
(Latest Update November 9, 2009)