NT2-Nakai-Dam

Investors of the Nam Theune 2 hydropower dam project confirmed they will start supplying electricity to Thailand by the end of 2009 as planned, as Laos is gearing up towards its foreign investment promotion plan for electricity sector in order to become a leading power export of Southeast Asia. 

Between late June and early July, NT2 developers have successfully tested the performance of the electricity generator and managed to link its power transmission line to that of the Electricity Generating Authority of Thailand (EGAT) without any problem.

Under a power purchasing agreement between the Lao government, NT2 developers, and EGAT, the NT2 dam will supply 995 megawatts of electricity to EGAT for 25 years. During that period, the Laotian government stands to receive 25 percent or about 2 billion dollars worth of concession fees, taxes as well as dividends from the project's income and profits as a joint investor. Other investors expect to earn 3 billion dollars from the hydro power export.

Developers say the NT2 project has cost approximately 1.45 billion dollars

NT2 turbine

worth of investment in the construction and the administration of the project's environmental and social impacts management. The World Bank had agreed to act as a guarantor of foreign loans for investors because the project meets international standards of protection of social and environmental impacts, and at the same time will generate income for the government to spend on other development projects to alleviate the country's poverty.

The NT2 project has become the Lao government's prototype or showcase for development projects to eradicate poverty. The World Bank recently brought a delegation from Tajigkistan to visit the project site and study specific aspects of the project.

Moreover, Laos regards the NT2 project as a showcase for other hydro- power dam projects earmarked for the promotion of foreign investments as the country sets out to become a major hydropower exporter or electric powerhouse of Southeast Asia in the future.

However, the current global financial crisis has caused a delay in most of foreign investors' dam construction plans in Laos, and consequently will have a direct repercussion on the country's powerhouse plan.

Songrit reported in Lao and summarized in English.