Vientiane Times, March 26, 2014
Xe-Pian Xe-Namnoy Power Company has secured funding to finance its hydropower project in the southern provinces of Laos, after four leading Thai banks agreed to fa cilitate the credit.
The company’s CEO, Mr Choi Young-Ju, announced last week that Krungthai Bank, the Export-Import Bank of Thailand, Bank of Ayudhya and Thanachart Bank had agreed to provide the company with US$700 million in loans to finance the project.
Construction of the 410 MW hydropower plant on the Bolaven Plateau bordering Champassak and Attapeu provinces is expected to begin in the near future, while commercial operation is scheduled to kick off in 2018.
The 410 MW hydropower plant is expected to generate 1,860GWh per year. About 370MW from the project will be distributed to the Electricity Generating Authority of Thailand under a 27-year power purchase agreement while the rest will be directed to Laos’ electricity grid.
The four banks’ decision to finance the hydropower project was one of the best reflections that Thai banks are confident about financing mega-investment projects in Laos.
Surging demand for electricity in Thailand has helped convince Thai banks to finance the project, which will generate the income to pay off the debt.
Xe-Pian Xe-Namnoy Power Company is a joint venture of SK Engineering and Construction Co with 26 percent, Korea Western Power Co with 25 percent, Ratchaburi Electricity Generating Holding Plc with 25 percent and the government of Laos via Lao Holding State Enterprise with 24 percent.
Mr Choi said once commercial operation started in 2018 and electricity started to be produced the project would not only make an outstanding contribution to economic development in Laos over coming decades but also help Thailand stabilise its power demand in the future.
Thailand has agreed to purchase 7,000 MW of power from Laos by 2015. At present, Laos has at least 20 hydropower plants with an installed capacity of about 3,000 MW.
The country has the potential to build 100 hydropower plants with an installed capacity of about 28,000 MW.
A number of Thai banks have established offices in Laos after learning that they need to provide service to their customers in the country.
There are a number of Thai investment projects in Laos. Most of them are involved in the construction and operation of hydropower plants.
One of the mega-investment projects that Thai banks have agreed to finance is the Xayaboury hydropower project, which is the first Mekong dam in Laos.
The Hongsa lignite-fired power plant is another Thai-funded project.