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dam-l LAOS: Viability of four export projects in question
Bangkok Post, Thursday June 18 1998
ENERGY / LAOTIAN POWER PLANTS
Viability of four
export projects in
question
Funding plus reduced Thai demand cited
Boonsong Kositchotethana
Ahost of problems including funding threaten the viability of four large
power-generation projects in Laos.
Thai energy officials are now sceptical that the projects, which would
export a total of 1,956 megawatts, can proceed as planned. The
projects have been promoted by joint ventures that include Thai
companies.
The projects are: Hongsa, a lignite-fired plant to export 608
megawatts with commissioning in 2002; the Nam Ngum 3
hydropower plant (430 megawatts, 2003); the Nam Ngum 2
hydropower plant (553 megawatts, 2003); and Xe Pian-Xe Nam Noi
(365 megawatts, 2004-6).
After a recent review, the National Energy Policy Office (Nepo)
concluded that the ventures would be "considerably delayed",
prompting it to take a second look at the country's master plan for
importing power from Laos.
A senior Nepo official said the Hongsa project sponsor, Thai-Lao
Lignite, had asked to renegotiate power sale tariffs with the Electricity
Generating Authority of Thailand (Egat), citing the depreciation of the
baht. New talks could result in postponement of the project for some
time.
The Hongsa tariffs are tied partly to the baht and partly to the US
dollar. Laos has also called for a revision of the tariff structure since
the depreciation of the baht had greatly reduced potential returns to
Hongsa sponsors.
At the same time, industry sources said there have been unspecified
disagreements among shareholders of Hongsa, further complicating
project financing.
Egat completed a power-purchase agreement with the Hongsa group
last December, a draft of which is still being scrutinised by the Office
of the Attorney General.
In the case of Nam Ngum 3 and 2, preliminary agreements for power
sales were agreed on by Egat and the two developing consortia last
September. A commercial operating date of March 2003 was
planned.
However, negotiations for a formal power purchase agreement have
made little progress and the commercial operating date also looks
doubtful.
Meanwhile, negotiations on power sales with the Xe Pian-Xe Nam
Noi consortium have just begun and no early conclusion is foreseen.
The consortium consists of the Laotian government, Dong Ah of
South Korea, and Electrowatt.
Savit Bhotiwihok, the Prime Minister's Office minister overseeing
energy policy, met recently in Vientiane with Laotian ministers
including Deputy Prime Minister Boonyoung Worlajit. Dr Savit asked
Laos to look at the viability of all four projects and realistic completion
dates.
Assigning priorities to projects will be essential to Thailand's planning
of procurement of power supplies from domestic and neighbouring
sources.
A memorandum of understanding is in place for Thailand to purchase
up to 3,000 megawatts from Laos by 2006. To date, Egat has
finalised power purchase agreements for two Laotian projects: Thuen
Hinboun (187 megawatts) and Houay Ho (126 megawatts).
Deliveries of Thuen Hinboun power began on April 1.
Laotian ministers have renewed calls for Thailand to increase power
purchases beyond the 3,000-megawatt level.
Officials from the two countries have identified a total of 10 projects
with a proposed export capacity of 4,254 megawatts.
Laos is said to be reacting to pressure in that it has granted
concessions for 17 power projects and all the sponsors are looking
for the market, which is Thailand.
However, due to the economic crisis and a slowdown in national
power demand, Thailand is reluctant to discuss the issue.
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Aviva Imhof, Mekong Program Coordinator
International Rivers Network
1847 Berkeley Way, Berkeley CA 94703 USA
Tel: + 1 510 848 1155 (ext. 312), Fax: + 1 510 848 1008
Email: aviva@irn.org, Web: http://www.irn.org
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