Export Credit

Laos dam operator hopes France’s EdF will stay

(August 27, 2003) The operator of a $1.1 billion dam scheme in Laos said on Wednesday it still hopes cornerstone investor Electricite de France (EdF), which said last month it was pulling out, will remain a key player in the scheme.

BANGKOK, Aug 27 (Reuters) – Ludovic Deplanque, spokesman for Nam Theun 2 Power Co, told Reuters existing investors were awaiting final confirmation from the French utility after their executives returned from holiday next month.

“Right now EdF is still not clear on whether it is a full withdrawal from the project or a partial withdrawal,” Deplanque said in Bangkok.

“There is an opportunity that they will remain in the project, hopefully. We will know that in one or two weeks.”

EdF said on July 17 it would withdraw from the planned Nam Theun 2 hydropower dam project by December, saying the decision was in line with its strategy of consolidating assets and refocusing priorities on Europe.

The pullout put the future of Indochina’s largest hydropower dam in doubt as the major buyer of power from the dam, the Electricity Geneating Authority of Thailand (EGAT), said it would scrap purchase plans if a new investor was not found in a year.

The Lao government, pressed by the EGAT ultimatum, gave Thai investors a three-month deadline to replace EdF, which had a 35 percent stake in the scheme.

Deplanque said although a couple of Chinese firms showed interest in the project and the Thai investors said they wanted to raise their equity in the scheme, EdF’s presence was crucial for the financing of the dam.

“There is a real hope from partners as well as the government of Laos to see EdF staying in the project at a certain level, probably at a lesser interest in the equity ownership and some role in the construction,” Deplanque said.

“Thai companies are obviously interested in raising up their equity but it doesn’t solve the construction aspect, which is the main issue here. We need to find out how we can satisfy the lenders as far as the construction of the project is concerned.”

Other partners in the 1,070 megawatt project are Thai contractor Italian-Thai Development PCL, with a 15 percent stake, Laos’ state power producer and Thailand’s Electricity Generating PCL each with a 25 percent stake.

The dam was expected to bring the impoverished Southeast Asian country an average export income of $80 million a year through the sale of most of its output to EGAT.

“Today we are still in some kind of standby situation. Hopefully it will not last more than three weeks before we know what will go on,” Deplanque said.

Nopporn Wong-Anan, August 27, 2003

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