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Government Plans and Policies
Government plans for power development
The Lao Government’s plans and policies for the power sector involve rapid and simultaneous development on several fronts with a view to:
- Expanding the generation, transmission, distribution and off-grid development to increase the domestic electrification ratio for the country from the current level of about 60% (in early 2008) to a target of above 90% by 2020;
- Increasing government revenues from Independent Power Plant (IPP) export investments and honoring power export commitments with neighboring countries by promoting a producer development carried out by private sector;
- Promoting 500kV grid development within the Greater Mekong Sub-region (GMS) to integrate the power systems of Lao PDR and its neighbours.
Following the implementation of the Memoranda of Understanding (MOUs) that were signed with the Government of Thailand and the Government of Vietnam a numbers of projects have been studied in respect of feasibility, as well as social and environmental impact. IPP projects that export energy to neighboring countries are required to set aside at least 10% of total installed capacity for the supply of electricity to the local market.
Plans to Supply to Thailand
Concession agreements and power purchase agreements have been finalised for the projects listed below. These projects are in the pipeline, aiming at achieving financial close by the end of 2008 or mid 2009 and then supplying electricity to Thailand as scheduled. Projects in this category are:
- Nam Ngum 3 Hydropower Project (440MW) is a joint development by MDX Co Ltd of Thailand, Marubeni Corporation (Japan),Ratchabury (Thailand) and Lao Holding State Enterprise (LHSE). The project was scheduled for commercial operation in 2014;
- Nam Ngiep 1 Hydropower Project (262MW) is a joint investment by Kansai Electrics (Japan), EGAT International (Thailand) and LHSE (Laos). 2015 is the anticipated date for commercial operation.
- Nam Theun 1 Hydropower Project (523MW) is being jointly developed by Gamuda Berhad (Malaysia), EGCO (Thailand) and LHSE (Laos). March 2014 has been set for commercial operation.
- Nam Ou Hydropower Project (1100MW) is a development being headed by Sinohydro Corporation of China. The developer is in discussions with EGCO (Thailand) to join the investment as a strategic partner. The project is planned to achieve commercial operation by 2015.
- Hongsa Lignite-Fired Power Project (1800MW) is the only non-hydropower project being developed in Lao PDR to date. The project is expected to be energised in 2013.
Plans to Supply to Vietnam
The Xe Kaman 1 Hydropower Project with its installed capacity of 290-320MW is the most advanced project following the start of construction of the Xe Kaman 3 Hydropower Project that commenced in 2006. Other hydropower projects such as the Xekong Hydropower Project 3A and 3B, with installed capacities of 152MW and 96MW respectively, are under study. A further study, involving the Dak Emeule Hydropower Project with an installed capacity of 138MW, is due to be finalised by the end of 2008.
Plans to Supply to Cambodia
So far, there is no specific hydropower project being developed for the supply of electricity to Cambodia. But, in December 2007 Electricite du Cambodge (EdC) and Electricite du Laos (EdL) signed a power purchase agreement whereby EdL will supply around 10MW from its southern grid to meet small load demand centres across the border in Cambodia. In the meantime, there is an agreement in place between the two governments for the supply of 200MW from Laos to Cambodia by 2020.
Plans for Domestic Supply
In addition to the 10% of total capacity that was to be made available for local supply through the IPP export projects, several medium size IPP projects have been nominated by the Lao Government for development to meet demand in the country.