The signing took place Saturday in the Lao capital Vientiane between the Electricity Generating Authority of Thailand (EGAT) and the Nam Theun 2 Power Company (NTPC), set up in August 2002 to build and operate during 25 years the plant on the Nakai Plateau, some 250 kilometres (156 miles) east of Vientiane.

The consortium will provide 995 megawatts of electricity to EGAT during this period and 75 megawatts to Electricite du Laos.

A previous attempt to sign the agreement on July 18 had to be aborted at th eleventh hour after state-owned Electricite de France (EDF), the majority shareholder in NTPC, announced it was withdrawing from the project.

The French government finally reviewed its position in October, also paving the way for EGAT’s return.

NTPC, however, still has another significant hurdle to overcome.

The signing, “indicates that the overall legal foundation of the project has been secured,” said Onneua Phommachanh, minister of Industry and Handicrafts.

“Nevertheless, there is much work still to be done by all involved parties including the sourcing of finance for the project and the fulfillment of obligations of the government as mutually agreed with the World Bank and the International Monetary Fund.”

Jean-Pierre Serusclat, Chairman of NTPC and President of EDF South East Asia Ltd, said the project would now require that all partners “implement on a timely manner the development agenda that has been carefully defined.”

EGAT, the Lao government and NTPC are “three partners in the same boat, working alongside so that NTPC’s future financing partners… could come on board safely,” he said.

The project should be financed by a combination of equity from the shareholders, multilateral institutions including the World Bank, Asian Development Bank, European Investment Bank, as well as the Agence Francaise de Developpement, Export Credit Agencies and Commercial Banks.

Laos is expected to accrue an estimated two billion dollars in revenue over 25 years from the plant and has touted it as essential to helping alleviate widespread poverty in the Southeast Asian country.

Despite July’s embarrassment, which was only the latest in a series of delays that have embroiled the projec.t, NTPC says work on the four- turbine plant, its dam and 450 square kilometre reservoir is still likely to begin early next year, with full operations slated for 2009.

EDFI owns a 35 percent stake in NTPC. Electricite du Laos and EGAT subsidiary EGCO each took a 25 percent holding, while Italian-Thai Development Co., another Thai company, took a 15 percent stake.