Work to start this year on largest power plant in Laos

By Vientiane Times Reporters 1 February 2010

Construction of the largest electricity power plant in Laos will kick off at the end of this year according to a Lao shareholder in the project.

“The ground breaking ceremony for the Hongsa lignite project is planned for November,” Lao Holding State Enterprise Deputy Director General Dr Sayphet Amphayvanh said on Friday after paying a visit to the site in Hongsa district, Xayaboury province.

Planning for construction of the 1,800 MW electricity power plant was well advanced. Land clearance and resettlement of about 259 families in the project area is expected be completed on time.

“Preparations for the project began in 2007,” he said.

Dr Sayphet said the project developers expect to reach a power purchasing agreement with the Electricity Generating Authority of Thailand (EGAT) this month, one of the decisive conditions for them to secure funding for the project.

The project developers and EGAT agreed on a tariff for the electricity in May last year.
Dr Sayphet said construction of the about US$3.5 billion electricity generating facility would take five years to complete, adding that commercial operation of the power plant will begin in 2015.

Deputy Minister of Planning and Investment Thongmy Phomvixay signed the project concession agreements with representatives of the Hongsa Power Company in November.

The move gave legal backing to project shareholders of the Ratchaburi Electricity Generating Holding Public Company (RATCH), Banpu Power Limited (BPP) and Lao Holding State Enterprise (LHSE) to construct the plant on 60 square km in Hongsa district, more than 300 km from Vientiane.

The concession period begins on the execution date and ends 25 years after the commercial operation date of the project, according to the agreement.

According to LHSE, the project has two parts. First, lignite will be locally mined to supply the plant and then power will be generated by the plant.

LHSE will have a 25 percent share in the lignite mine and Banpu will have a 37.5 percent share with the remainder belonging to RATCH.

LHSE will hold a 20 percent share in the power plant, with Banpu and RATCH each to hold a 40 percent share.

LHSE and BPP will utilise their extensive mining and power project development experience to provide the necessary support for the project while RATCH will provide its expertise in power project development to ensure the project uses the most up-to-date and efficient technologies.

LHSE has valuable power development experience in Laos and will ensure the necessary coordination with local authorities.

The three project shareholders have made a strong commitment to ensure the project's compliance with all applicable environmental standards, the extensive international environmental control system and tools to be installed.

They promised that the living conditions of people who live in project area would improve.

The government believes a project of this scale will yield high revenue while providing Lao people with jobs and income, one of the main factors in helping them to shake off poverty.