Yuthana

October 5, 2001

Nam Theun 2 Project could face financial doubts.

A plan to launch a power pool system in Thailand with the government of Laos and the Nam Theun Electricity Consortium (Ntec) might cause the Electricity Generating Authority of Thailand (Egat) to delay purchases from the Nam Theun 2 project. Both Ntec and Egat signed a memorandum in May last year that required the Thai utility to buy 95% of the power generated from the Nam Theun 2 project, starting from 2006. The government of Laos and Ntec now believe the planned power pool would put the Nam Theun 2 project at risk, as it would be forced to compete with other independent power producers in Thailand for contracts to supply Egat. The memorandum provided a price guarantee to Nam Theun 2 for seven years. If the price guarantee agreement expired before the power pool started, the project would face financial uncertainty. It remained uncertain when the power pool would start but the National Energy Policy Office has expressed certainty that it would begin in 2003. As well, Egat and Ntec are now deadlocked over the electricity price. Both sides were required to wrap up the price and supply deal by the end of this year, said Egat governor Vittaya Kotcharak. Egat will buy 920 megawatts of electricity from Nam Theun 2, part of the 3,600 MW that Egat is committed to buying from Laos. Currently, Laos supplies 568 MW of electricity to Thailand and will supply the remaining 3,000 MW later, depending on future negotiations.