Vientiane Times, February 05, 2013
Russian Region Oil Company plans to set up a company to operate three hydropower dams in the southern provinces of Laos by the middle of this year, as soon as an agreement with a new shareholder was reached.
Region Oil signed off on a joint development agreement (JDA) with EGAT International Company Limited of Thailand (EGATi) on Friday in Vientiane.
Since 2005, Region Oil planned to develop the Xekong 4 and Nam Kong 1 hydropower plants in Attapeu province and the Xekong 5 plant in Xekong province, requiring a combined estimated investment of about 12 trillion kip (US$1.5 billion), according to a press release distributed at the signing ceremony.
“So far Region Oil has spent more than 160 billion kip (US$20 million) to progress the projects, using our own revolving capital,” the Region Oil Deputy General Director, Mr Vasily M. Morgun, said.
EGATi representative, Mr Paisan Katchasuwanmanee, said the auspicious signing of the joint development agreement signing exemplifies another of many accomplishments between Region Oil and EGATi.
Joint cooperation was initiated in September last year and materialised through the signing of a Memorandum of Understanding (MOU) in October, Mr Paisan said.
“Since then, both parties have dedicated their full effort in moving forward with the development of the three projects,” he observed. “The agreement demonstrates the commitment to jointly cooperate and push forward with the projects.”
The press release noted the developers expect to complete all the required documents by the end of this year, including their respective financial contributions and shareholdings in the three projects.
“Currently, Region Oil and EGATi are preparing a Tariff Memorandum of Understanding (Tariff MOU) that will supply electricity to the Thai power grid,” the handout noted.
“And in the near future, the two parties also plan to submit or propose the Tariff MOU to local energy buyers and supply electricity to the Lao national power grid for domestic consumption.”
Mr Morgun said a new company will be set up to build and operate the three projects and will be a joint venture between the Lao government-owned Lao Holding State Enterprise, Region Oil, EGATi and Inter Rao Ues JSC of Russia.
However the company has not revealed yet what the value of each shareholder’s stake will be because now it is at the initial stage or level of the joint development agreement.
Once the three hydropower plants are built, they will have a total installed capacity of 822 megawatts; and Region Oil will operate the projects for a period of 30 years. The developers say they plan to actively develop these projects to lay an important foundation for the development of infrastructure, the economy and social welfare in the southern provinces of Laos.
Region Oil has obtained a complete set of environmental compliance certificates approving the environmental management and social protection plans for the construction of the three dams. It has also received certificates from the Lao Water Resources and Environment Authority.
In 2005-2006 Region Oil and the Lao government signed four MOUs to develop the three hydropower projects, while in June 2008 and June 2009 Region Oil signed project development agreements with the Lao government in relation to the proposed dams.