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Laos hopes to ink hydropower pact with Thai EGAT by end-Nov

Xinhua News Agency

October 31, 2001

Laos hopes to sign a power purchase agreement with EGAT by end-November, for electricity sales to Thailand from the Nam Theun 2 hydropower dam.

SINGAPORE (Dow Jones)–Laos hopes to sign a power purchase agreement with the Electricity Generating Authority of Thailand by end-November, for electricity sales to Thailand from the Nam Theun 2 hydropower dam, the vice chairman of Laos’ State Planning and Cooperation Committee told Dow Jones Newswires Wednesday.

“We are grateful to the Thai government for standing by the agreement” to buy power from Laos, despite revised electricity demand projections in the wake of the Sept. 11 attacks, Khempheng Pholsena said.

The project will begin exporting power to Thailand from 2007, rather than 2006 as previously planned, she said.

EGAT committed to buy 3,600 megawatts of electricity from Laos, including 95% of the power generated by the 1,060 MW Nam Theun 2 project.

The US$1.1 billion build-operate-transfer project is being developed by Electricite de France (F.EDF), with 35%, EGAT with 25%, Electricite du Laos with 25% and Italian-Thai Development Plc, with 15%.

However, falling demand projections in Thailand have created doubts as to the project’s viability. The World Bank, which has come under criticism from environmentalists over the dam, won’t release funding for the project without the power purchase agreement.

“We meet all the World Bank requirements” on environmental impact, Khempheng said.

The Lao government has in the past expressed concern that Thailand’s transition to a power pool, slated for 2003, will derail long-term power purchasing agreements like Nam Theun 2. The power pool system, which favors the lowest cost generator, may make EGAT’s long-term purchase commitments uncompetitive.

Khempheng spoke on the sidelines of a seminar organized by Singapore’s Trade Development Board, to promote investment ties with Laos.

– By Lucy Hornby, Dow Jones Newswires; 65 415-4065; lucy.hornby@dowjones.com

Copyright © 2001 Dow Jones & Company Inc. All rights reserved. Copyright © 2001 Yahoo! Inc. All Rights Reserved.

== 110601 Xinhua– Thailand-Laos to Sign Electricity Trading Pact

Story Filed: Monday, November 05, 2001 10:45 PM EST

BANGKOK, Nov 6, 2001 (Xinhua via COMTEX) — The Thai and Lao governments are to sign a pact for the Nam Thern 2 generating project, which is set to make history as the largest investment project in Laos, the Thai News Agency (TNA) said Tuesday.

The National Energy Police Office was quoted as saying that Prime Minister’s Office Minister Chaturon Chaisaeng would put his name to the agreement together with Lao Industry and Crafts Minister Surawong Darawong in December.

The Nam Thern 2 project forms part of an earlier Thai-Lao electricity trading pact, under which Thailand agreed to purchase 3,000 megawatts of electricity from its neighbor.

The signing of the pact will give a clear signal that the project will go ahead, and will enable investors to enter into loan negotiations with financial institutions such as the World Bank.

The Nam Thern 2 generator will require investment of 1.1 billion

U. S.dollars, 70 percent of which will come from loans.

As such it marks the largest investment project in Laos, and the one expected to generate the highest revenues at 200 million U.S. dollars per year.

Initially the electricity will be traded under a 13-year contract, after which the two governments will enter into further negotiations concerning whether the contract should be extended, or whether the electricity in question should enter the free-market power pool to be established by Thailand.

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