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Nam
Theun 2 to go ahead
Soudalath Phonpachith
THE President of the World Bank gave a positive signal to the Nam Theun 2 hydro
project during last week's two-day visit to Laos, when he went to inspect the
Nam Theun 2 project area of the Nakhai plateau.
"The project has a very good chance of being approved. I am going ahead
with it. I come here to have a look myself and I am very impressed, so I will do
my best to makes sure that the project proceeds," said Mr James Wolfensohn.
He added that within the next couple of months the World Bank board would give
their response to the project, after receiving Mr Wolfensohn's report on his
visit.
This is the first time that Mr Wolfensohn has visited Laos, but is the last
stage for the Nam Theun 2 (NT2) project before the final word is given on a
World Bank political risk guarantee.
"This is the last inspection by the World Bank and the final step in
consideration for project approval," said Lao National Committee for Energy
Secretariat office head Xaypaseuth Phomsoupha.
The project must have made sure that it has local support from those it affects,
and must help reduce poverty and safeguard the environment, said Xaypaseuth
The World Bank President's trip was at least in part to find out for himself
what the reaction is from those who will be affected by the project, and he will
inform the Bank Board of his findings.
Mr Wolfensohn and his party were met at Savannakhet airport by Deputy Prime
Minister and Planning and Investment Committee President Dr Thongloun Sisoulith.
After visiting the NT2 project site, they took a flight over the Nakai plateau.
Landing in Nakai district, they were welcomed by Industry and Handicraft
Minister Onneua Phommachan, Khammuan province governor Khambai Damlath and NT2
officials for a baci ceremony. They spent the night in Nakai.
On Saturday, the president visited the pilot resettlement village in Nakai
plateau and asked villagers about the difference in living conditions between
the old area and their new village.
Then Mr Wolfensohn visited Mahaxai district to meet Xebang Fai villagers and
asked about their feelings.
At the end of this month the Lao government will negotiate with investors about
the contract and at the end of March they will sign contracts to be sent with
all documentation to the World Bank for approval in April, said Xaypaseuth
Phomsoupha.
The NT2 hydroelectric project has been identified by the World Bank as a key
project for the economic and social development of the Lao PDR. It is owned by
the Nam Theun 2 Power Company (NTPC), a limited company under Lao law. NTPC will
build and operate the dam, and transfer the project to the Lao government after
25 years.
NTPC is 35 percent owned by the French EDF International (wholly owned
subsidiary of Electricite de France); 25 percent by the Electricity Generating
Public Company Limited of Thailand; 25 percent by the Lao government; and 15
percent by the Italian-Thai Development Public Company Limited of Thailand.
NTPC has agreed to sell 95 percent of electricity generated by NT2 to Thailand,
995 MW worth US$5 billion, for 25 years. Another 75 MW will go to Electricite du
Laos for domestic consumption.
The project's total cost is over US$1 billion, 28 percent from shareholders and
72 percent international debt financing.
The Asian Development Bank and export credit agencies will provide risk
guarantees or other financial instruments. Board approvals are expected between
March and April, with a deadline of May 8 as the start for full construction
activities.
The government considers the project to be the key to sustainable development,
with revenue providing important finance for poverty eradication. The government
expects to receive about US$2 billion over 25 years from the project, after
which it expects to get US$240 million per year.
Survey work began in 1987, costing US$4 million, supported by the World Bank and
UNDP. In October 2002, NTPC signed agreement with the Lao government to operate
the project for 25 years after beginning operations by the end of 2009.
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