Vientiane Times
August 14, 2008

Xekaman 3 construction costs rise

Construction costs for the Xekaman 3 hydroelectric scheme in Dakcheung district, Xekong province, are expected to increase by 337 billion kip (about US$39 million).

The initial construction budget stood at about 2.4 trillion kip (US$273 million), but is now predicted to rise to about 2.7 trillion kip (US$312 million), according to a recent report from the Electricity Department of the Ministry of Energy and Mines.

The increase is primarily due to recent surges in global oil prices which have influenced material prices for the project.

“We haven’t approved the new budget yet because we want the Xekaman 3 Power Company to study the project’s expenditure,” said Electricity Department Deputy Directory General, Mr Hatsady Sisoulath.

The study will also include an adjustment to the purchase price of power once the project is complete. The initial agreement was for a purchase price of US 4.2 cents per kilowatt-hour.

“We haven’t discussed the new price yet, we will wait for the results of the study,” Mr Hatsady said.

The financial changes will not impact on the construction of the project which will continue as scheduled. “Share investments will not change,” Mr Hatsady added.

The project is a joint investment between the Lao government, which holds a 15 percent share, and a Vietnamese investor who will manage project operations for the next 30 years.

The facility will have a power capacity of 250MW and generate 1 billion kWh of energy per year for export to Vietnam . Construction began in April 2006 and is scheduled for completion in 2009.

Électricité du Laos Managing Director, Mr Khammany Inthirath, said 25MW of power will go towards meeting local markets.

Vietnam has agreed to purchase a total of 5,000 MW of electricity from Laos between 2007 and 2020.

To meet power demand from Vietnam , Laos officials hope to expand hydropower investments to a further 13 projects, mostly in the southern provinces.

The projects include Nammo 1 and 2, Xekaman 1, 3 and 4, Dak-i-meun , Nam Ngep, Xekong 3, 4 and 5 and Namkong 1, 2 and 3. These projects are expected to be completed by 2020.

Laos currently has 11 major hydropower plants in operation and at least 36 smaller ones. These generate energy for both domestic and export markets and have a combined installed capacity of more than 670 megawatts. The 36 smaller hydropower plants are all government investments.

Together, they generate approximately 3.5 billion kilowatt-hours per year, of which about 2.2 billion kilowatt-hours is exported to Thailand .