The 1,070-megawatt Nam Theun Two hydropower project is due to be completed in 2009, and will be Indochina’s biggest.

Officials involved in the project told Reuters legal disputes in the long-awaited power purchase agreement had been ironed out and the signing would take place in the middle of the month.

“Everything has been settled and the signing ceremony for the power purchase agreement is scheduled for July 18 in Vientiane,” Thai Ambassador to Laos Rathakit Manathat told reporters.

Ludovic Deplanque, spokesman for project operator Nam Theun 2 Co, a Thai-French-Laotian joint venture, told Reuters the signing might take place even earlier. “Until yesterday we were talking about the 11th,” he said.

Deplanque said that after the power purchase pact had been signed, the company had to complete its financing, including a loan guarantee from the World Bank and loans
from other creditors such as a French development agency, within 18 months.

The plan involves starting construction of some roads to the dam site in late October.

He said the loans would account for around 70 percent of the $1.1 billion investment. The remainder would come from investors in the project, including major listed Thai and French utilities.

The power project, crucial to the economic strategy of the Laotian communist government, will flood 450 square km (174 sq miles) of tropical forest and fertile farm land.

Thai officials said Nam Theun 2 would sell about 995 megawatts of power to the state-owned Electricity Generating Authority of Thailand (EGAT), and 75 megawatts to
state-owned Electricite du Laos.

Laotian officials say sales to the Thai buyer would generate $100 million-$200 million in annual income in a country where three-quarters of the population live on less than $2 a day. Pricing details of the power purchase agreement were not immediately available.

A third of the country’s $300 million in annual exports already comes from power sales, mainly to Thailand. EDF International, a unit of Electricite de France [EDF.UL], has a 35
percent stake in the project and Thai construction contractor Italian-Thai development has 15 percent.

Thailand’s Electricity Generating Plc (EGCO) and Electricite du Laos each holds 25 percent of the project.