, Thailand

ADB to extend $465M loan for 440MW Laos hydro project

ADB will provide approximately $465 million to support the construction of a 440-megawatt hydropower plant that will supply power to Thailand.

 

It will also create much-needed revenue to fund poverty reduction programs in the Lao People’s Democratic Republic.

“Earnings from clean energy exports are vital to poverty reduction efforts in landlocked Lao PDR, where one in every three people survive on less than $1.25 a day,” said Christopher Thieme, Director in ADB’s Private Sector Operations Department.

The new plant is expected to generate upwards of $770 million for Lao PDR, of which more than $200 million is specifically earmarked for poverty reduction and environmental protection programs.

The public-private Nam Ngum 3 power plant, on the Nam Ngum River in northern Lao PDR, will provide 2,072 gigawatt hours of clean energy annually for export to neighboring Thailand.


“By using hydropower instead of fossil fuels, Thailand will avoid an average one million tons of carbon dioxide emissions every year – the equivalent of taking 175,000 vehicles off the road,” said Anthony Jude, Director in ADB’s Southeast Asia Department.

The Nam Ngum 3 project will comprise a 220-meter-high dam that will create a 27.5 square kilometer reservoir.

The plant, estimated to cost around $1 billion, will be built and operated for 27 years by the Nam Ngum 3 Power Company, which is owned by three private sector companies: Thailand’s GMS Lao Company Ltd. and Ratchaburi Electricity Generating Holding PCL, together with Axia Power Holdings, a wholly owned subsidiary of Japan’s Marubeni Corporation. The Government of Lao PDR will also hold a stake through the Lao Holding State Enterprises.

ADB will lend up to $350 million to NN3PC. Under a risk participation agreement, commercial financial firms will assume the risk on up to $150 million of that. Thai banks and other international financial institutions will also provide loans to the project.  ADB is also lending approximately $115 million to the Lao PDR government to finance LHSE’s equity stake in NN3PC.

The Nam Ngum 3 plant, expected to be operational in 2017, will be located upstream of two existing hydropower plants, and downstream from another plant that is currently under construction. The Nam Ngum 4 A and B plants are also planned upstream of Nam Ngum 3.

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