Study On Independent Power Producers (IPPs) 2017
Study On Independent Power Producers (IPPs) 2017
Study On Independent Power Producers (IPPs) 2017
Final Report
February 2017
Prepared for:
Prepared by:
Tokyo Electric Power Company Holdings, Inc.
Hokuriku Electric Power Company, Inc.
Reproduction Prohibited
Ministry of Economy, Trade and Industry
Study on Economic Partnership Projects in Developing Countries in FY2016
February 2017 Prepared by
Study on Independent Power Producers (IPPs) in Lao People's Democratic Republic
Tokyo Electric Power Company Holdings, Inc.
Hokuriku Electric Power Company, Inc.
Preface
This report puts together the findings and results of Economic Partner Projects for Fiscal Year 2016 undertaken by Tokyo Electric
Power Company Holdings Inc., together with Hokuriku Electric Power Co., contracted and funded by the Ministry of Energy,
Trade and Industry of Japan.
This study, Project Identification Study on Independent Power Producers (IPPs) in Lao Peoples Democratic Republic, aimed
to identify several IPP projects for investment targets in the country and survey the maturity, hydrology, socio-environmental
conditions, sponsors requirements, etc. of hydropower projects, in close collaboration with candidate sponsors for investment
and with attentive assistance from the Ministry of Energy and Mines, the Ministry of Planning and Investment, and several
Prefecture Offices in Lao PDR.
We strongly hope that this report helps to realize these projects and that it will serve as a useful reference for related parties in
Japan.
February 2017
Tokyo Electric Power Company Holdings, Incorporated
Hokuriku Electric Power Company, Incorporated
Project map
Preface
Project map
List of abbreviations
Table of contents
Summary
Capter1 Introduction..................................................................................................................................................1-1
(1) Background and circumstances of the survey.....................................................................................................1-1
(2) Purpose of survey .............................................................................................................................................1-1
(3) Survey method .................................................................................................................................................1-1
1) Content of survey .........................................................................................................................................1-1
2) Survey method / organization........................................................................................................................1-2
3) Survey schedule ...........................................................................................................................................1-3
4) Survey results ...............................................................................................................................................1-3
Capter2 Overview of the Host Country and Sector .....................................................................................................2-1
(1) Economy..........................................................................................................................................................2-1
(2) Electricity Sector ..............................................................................................................................................2-2
(3) Situation of the target area .................................................................................................................................2-4
Capter3 Identification of promising investment projects..............................................................................................3-1
(1) The long list of projects .....................................................................................................................................3-1
1) Existing hydropower plants...........................................................................................................................3-1
2) Hydropower projects under construction .......................................................................................................3-4
3) Hydropower projects with COD expected by 2025 ........................................................................................3-7
4) Hydropower projects with COD expected by 2030 ........................................................................................3-9
5) Hydropower projects with signed MOU......................................................................................................3-11
(2) Screening and evaluation criteria for prioritization........................................................................................... 3-15
1) Screening policy........................................................................................................................................ 3-15
2) Sorting lists by number of projects in old list............................................................................................... 3-16
3) Sorting lists by number of projects in new list ............................................................................................. 3-17
4) Sorting lists by capacity potential ............................................................................................................... 3-18
5) List sorted by river flow ............................................................................................................................. 3-19
6) Listing sponsors ........................................................................................................................................ 3-22
(3) Long list of promising projects narrowed down .............................................................................................. 3-23
(4) Candidate projects for investment................................................................................................................... 3-23
Capter4 Justification, Objectives and Technical Feasibility of the Projects ...................................................................4-1
(1) Background to Technical Feasibility of the Projects............................................................................................4-1
1) Projects by Nonghai Group...........................................................................................................................4-1
2) Projects by Electrical Construction and Installation, State Enterprise...............................................................4-1
(2) Basic policies and decisions on the content of the Technical Feasibility of the Projects ........................................4-1
(3) Outline of Technical Feasibility of the Projects...................................................................................................4-2
(4) Necessary Study Items......................................................................................................................................4-4
1) Extraction of Items for Consideration regarding Technical Aspects of Promising Project.................................4-4
2) Outline and Verification of Flow Setting in Candidate Project ........................................................................4-5
3) Outline and Confirmation of Head Loss and Rate Head in the Candidate Project ......................................... 4-24
4) Outline and Confirmation of Project Cost in Candidate Project ................................................................... 4-32
(5) Effect of Stable Energy Supply to Japan by Implementing Candidate Projects ................................................. 4-44
Capter5 Evaluation of Environmental and Social Impacts ...........................................................................................5-1
(1) Analysis of present state of environmental and social aspects .............................................................................5-1
1) Natural environment.....................................................................................................................................5-1
2) Socio-economic environment .......................................................................................................................5-3
3) Ethnic minorities ..........................................................................................................................................5-5
(2) Environmental improvement effects from the candidate projects ........................................................................5-6
1) Setting of a baseline ......................................................................................................................................5-6
2) Calculation of the baseline ............................................................................................................................5-6
3) Estimation of effect.......................................................................................................................................5-7
(3) Environmental and social impacts associated with candidate project implementation ..........................................5-7
(4) Outline of the partner countrys laws and regulations related to environmental and social considerations and necessary
measures for compliance with them ...............................................................................................................................5-9
1) Constitution of the Lao Peoples Democratic Republic (2015 revision)...........................................................5-9
2) Environmental Protection Law (2012 revision)..............................................................................................5-9
3) Water and Water Resource Law (1996 and 2013) ....................................................................................... 5-10
4) The Lao Land Law (1997) ......................................................................................................................... 5-10
5) Forest Law revised (2007 revision) ............................................................................................................ 5-10
6) Wildlife and Aquatic Law (2007) ................................................................................................................5-11
7) Decree on the Preservation of Cultural, Historical and Natural Heritage (1997).............................................5-11
(5) Matters to be implemented by the relevant country (implementing agency and other relevant agencies) to realize the
candidate projects ........................................................................................................................................................5-11
Capter6 Financial and Economic Evaluation ..............................................................................................................6-1
(1) Estimation of Project costs ................................................................................................................................6-1
1) Comparison of project costs of proposed projects ..........................................................................................6-1
2) Analysis of project costs for each proposed project ........................................................................................6-1
3) Calculation of cost of proposed project over project period.............................................................................6-4
(2) Outline of preliminary Financial and Economic Analysis results.........................................................................6-6
1) Economic Analysis.......................................................................................................................................6-6
2) Financial Analysis ..................................................................................................................................... 6-14
3) Sensitivity analysis .................................................................................................................................... 6-16
Capter7 Planned Project Schedul ...............................................................................................................................7-1
(1) Nam Ngiep 2C2B2A ................................................................................................................................7-1
(2) Nam Ban..........................................................................................................................................................7-1
Capter8 Present Status of Legal Improvement regarding Implementation of IPP Projects in Lao PDR..........................8-1
(1) Relevant laws ...................................................................................................................................................8-1
1) Law on Electricity (2011...........................................................................................................................8-1
2) Regulation on Small Hydropower Development............................................................................................8-2
3) Law on Investment Promotion (2009) ...........................................................................................................8-2
4) Law on Enterprise (2013...........................................................................................................................8-3
5) Other relevant laws.......................................................................................................................................8-3
(2) Relevant authorities ..........................................................................................................................................8-3
1) Ministry of Energy and Mines (MEM) ..........................................................................................................8-3
2) Ministry of Planning and Investment (MPI)...................................................................................................8-4
3) Province and Vientiane Capital .....................................................................................................................8-4
(3) Necessary Measures from the Viewpoint of Japanese Companies.......................................................................8-4
(4) Insufficiency and Deregulation from the Viewpoint of Japanese Companies .......................................................8-5
1) Insufficient regulatory arrangement ...............................................................................................................8-5
2) Deregulation request.....................................................................................................................................8-5
Capter9 Activities of Key Local Sponsors and the Off-Taker ......................................................................................9-1
(1) Sponsor (EDL-Gen) .........................................................................................................................................9-1
1) Outline of EDL-Gen.....................................................................................................................................9-1
2) Sponsorship of EDL-Gen .............................................................................................................................9-1
(2) Off-taker (EDL)................................................................................................................................................9-1
1) Outline of EDL ............................................................................................................................................9-1
2) Offtaking by EDL ........................................................................................................................................9-2
(3) Challenges from the Viewpoint of Japanese Companies .....................................................................................9-2
1) Take-or-pay clause........................................................................................................................................9-2
2) Settlement currency ......................................................................................................................................9-2
Capter10 Activities of Other Local Investors ............................................................................................................. 10-1
(1) Activities of investors who have concluded MOUs ......................................................................................... 10-1
(2) Development status based on MOUs for projects owned by other investors ..................................................... 10-1
(3) Causes of development stagnation.................................................................................................................. 10-1
Capter11 Technical Advantages of Japanese Company...............................................................................................11-1
(1) Possible participation forms for Japanese companies........................................................................................11-1
1) Sponsorship ...............................................................................................................................................11-1
2) Construction and equipment .......................................................................................................................11-1
3) Operation and maintenance.........................................................................................................................11-1
(2) Advantages and disadvantages of Japanese companies in project implementation (technical and economic aspects)
11-1
1) Technology advantages...............................................................................................................................11-1
2) Non-technical Disadvantages ......................................................................................................................11-6
3) Good practice power generation project by Japanese company in Laos.........................................................11-7
(3) Measures to Enhance Japanese Companies Participation.................................................................................11-9
Summary
1 Background and circumstances of the survey
In Laos, where hydropower resources are abundant, domestic electric power demand is increasing due to steady economic
growth, and progress in urban and industrial park development, and many power development projects to be undertaken by
independent power generation entities (IPPs) have been planned.
As of the end of 2015, there were over 300 projects such as these that had not yet come to fruition even after obtaining MOUs
for development, and numerous projects both good and bad have been presented to foreign investors, including Japan, by the
candidate sponsors. Under these circumstances, Japanese electric utility companies have also considered the possibility of
conducting multiple hydropower projects in Lao PDR, but they could not ascertain what kind of pros and cons each individual
project has compared to the others across more than 300 cases. They also did not know the details of concession contracts and
electricity purchase contracts and how they would develop. Therefore, they were interested in business investment but had not
yet reached the point of selecting specific projects and proceeding with commercialization.
1-1
(d) Collecting information on the sponsors
Screening of listed projects (prioritization by scale, project maturity, environmental and social constraints,
topography, flow rate, etc.)
Selection of promising areas (water system or prefecture unit) based on the screening results (1 or 2 areas in northern
and southern Laos respectively)
(e) Exchanging of views with relevant central and local government agencies, candidate sponsors, etc.
Explain about Japan's high-quality hydroelectric power generation know-how and JICA's overseas investment and
financing
(f) Approach to candidate sponsors and selection of investment candidate projects
Collecting information by direct contact with development rights owners that have promising projects, confirming
issues in project formulation, confirming cooperative intention with Japanese investors
Scrutinize investment candidate projects (technology/economic finance, commercial review, confirmation of
environmental and social considerations matters)
Gather and pick multiple candidate projects for investment consideration and formulate implementation plan for
commercialization
Calculation of quantitative effects on Japan's stable supply of energy through implementation of candidate projects
2) Survey method / organization
(a) Counterpart
The counterpart on the Laos country side is MEM. For the bureau, the Department of Energy Policy and Planning (DEPP) and
Department of Energy Business (DEB) are the counterparts.
The following will be the relevant government agencies/institutions.
MEM : Ministry of Energy and Mines
MPI : Ministry of Planning and Investment
MONRE : Ministry of Natural Resources and Environment
MOF: Ministry of Finance
EDL
Figure 1.1 Collaboration with Laos
1-2
(b) Structure and roles of the study team
Figure 1.2 shows the implementation structure for this survey work.
3) Survey schedule
The implementation schedule and flow for this survey are shown in Table 1.1.
Table 1.1 Implementation schedule and flow for the entire survey
1-3
Survey Period Main implementation items
First field 20 September Meetings with related ministries and agencies, EDL
survey 2016 - 29 Agreement with MEM DEPP and DEB as counterparts
September Meetings with sponsors
2016 Meetings with three sponsors who have projects of over 15 MW
Visiting a prefecture office
Visiting Xiengkhouang prefecture office to discuss the role sharing between the country
and the prefecture, the procedure for hydropower IPP development rights, and the problems
in development
Obtain the IPP list that the prefecture office has
Obtaining necessary information
Map, river flow rate, rainfall data etc.
Second 23 October Meetings with sponsors
field 2016 - 5 Meetings with five sponsors, collecting project information and discussing possibility of
survey November participation
2016 Sorting relationships for joint development projects
Visiting prefecture offices
Visiting six prefecture offices and hearing about the differences in the procedures for
granting development rights and the problems in development
Acquisition of IPP lists each prefecture office has
Field surveys
Implement site surveys at 5 locations and conducted technical evaluations
Share survey results with wrap-up sponsors in wrap-up meeting
Obtaining necessary information
GIS, PPA/CA Format etc.
Third field 4 December Visiting Government institutions
survey 2016 - 17 Interview EDL on the conditional aspects of PPA contract etc.
December Confirm the laws related to hydraulic investment with MPI
2016 Meetings with sponsors
Meetings with 4 sponsors, collecting project information
Discuss the issues regarding project promotion
Visiting a prefecture office
Visiting a prefecture office and discussing the differences in the procedures for granting
development rights and the problems in development
Field surveys
Implement site surveys at 3 locations and conducted technical evaluations
Share survey results with sponsors via wrap-up meeting
Obtaining necessary information
Environment-related documents
1-4
Water resource-related materials
Fourth 29 January Visiting Government institutions
field 2017 - 8 Confirming the power laws and government guarantee with MEM
survey February 2017 Confirming the PPA on IPP with EDL
Share survey results in wrap-up meeting
Meetings with sponsors
Meetings with sponsors, collecting project information
Meetings about PPA conditions and government guarantee
Source: study team-created
1-5
Capter2 Overview of the Host Country and Sector
(1) Economy
Lao PDR is a land-locked country in Southeast Asia, neighboring Cambodia, China, Thailand, Vietnam and Thailand. The
land area is 236,800 sq. km, approximately 70% of which is mountains and hills, and it is vested with abundant water resources
from tributary rivers flowing into the Mekong River. The population is approximately 6.5 million, and it is the third least
populated country in the ASEAN after Brunei Darussalam and Singapore. Key economic indicators are as follows.
(a) GDP
Nominal GDP: LAK 98,835 billion, approximately USD 11.7 billion (Bank of Lao PDR, 2014)
GDP per capita: USD 1,725 (Lao Statistics Bureau, 2014)
GDP growth rate: 7.56Lao Statistics Bureau, 2014
GDP composition: Agriculture 26%, Industry 31%, Service 37% (Lao Statistics Bureau, 2012)
(b) FDI
In 2015, the largest FDI was the power generation subsector, comprising 2 projects with USD 568 million investment, while
the largest by project number was the mining subsector, comprising 9 projects with USD 184 million investment. This
implies how large the power generation projects were. By country, Vietnam was the largest investor origin, comprising 3
projects with USD 466 million investment.
Cumulative investment from 1989 to 2014 by subsector and by country is shown in Tables 2.1 and 2.2. The power
generation subsector tops the investment amount (USD 6,671 mil.), while the agriculture subsector tops the number of
projects (989 projects). By country, China ranks top, followed by Thailand and Vietnam, whereas Japan ranks 6th.
1) Outline
Among ministries, MEM is responsible for the electricity sector. EDL is a state owned enterprise, and takes charge of
transmission and distribution. While EDL still owns a few generation facilities, the vast majority of generation capacity
has been transferred to EDL-Gen, its subsidiary, since December 2010. In addition, a number of IPPs are generating
electricity and selling it to domestic and export markets. The main off-taker for exports is EGAT in Thailand, and the
main off-taker for the domestic market is EDL.
The current structure of the electricity sector is shown in Figure 2.1. DEPP of MEM is responsible for energy and
electricity policy, power supply and demand forecast, electricity tariff regulation, etc.
Figure 2.1 Electricity Sector Scheme in Lao PDR
2-2
Figure 2.2 MEM Organizational Figure
2) Vision
The 10th Party General Assembly in January 2016 adopted Vision 2030, Ten-year Socioeconomic Development
Strategy 2016-2025and 8th National Socioeconomic Development Plan 2016-2020. Vision 2030 aims to quadruple
GDP per capita by 2030, and lists strategic goals in the electricity sector as follows.
Source: MEM
Household electrification ratio in Lao PDR was 88% in 2015, and the government aims to increase it to 98% by 2030,
as shown in Figure 2.4.
2-3
Figure 2.4 Households electrification ratio in Lao PDR
Source: MEM
2-4
2-5
Capter3 Identification of promising investment projects
(1) The long list of projects
The hydropower projects listed by status in Laos are shown below.
1) Existing hydropower plants
Table 3.1 shows the hydropower projects that are already operating and are over 15 MW.
There are 18 plants, the total capacity is 1,788 MW, and the total annual energy is 8,064 GWh.
Table 3.1 Existing hydropower plants (over 15 MW)
Annual
Capacity
No. Project Basin District Province Energy COD Developer Off-taker
[MW]
[GWh/y)]
1 Nam Ngeum 1 Nam Ngeum Kaeoudom Vientiane 155 1,160 1971 EDL_GEN EDL
2 Se Set 1 Se Kong Laongam, Salavan Salavan 45 134 1991 EDL_GEN EDL
3 Nam Loek Nam Ngeum Longsan Saisombun 60 218 2000 EDL_GEN EDL
4 Nam Mang 3 Nam Loek Thulakhom Vientiane 40 150 2009 EDL_GEN EDL
5 Se Set 2 Se Kong Laongam Salavan 76 309 2009 EDL_GEN EDL
CWE (China) 80% EDL
6 Nam Liik 1-2 Nam Ngeum Feuang Vientiane 100 435 2010
EDL_GEN 20% (IPP internal use)
Xiengkhwang Sinohydro (China) 85% EDL
7 Nam Ngeum 5 Nam Ngeum Phu Kut 120 507 2012
Luangphabang EDL_GEN 15% (IPP internal use)
EDL_GEN 60%
8 Nam Nyuwang 8 Nam Theun Khamkoet Bolikhamsai 60 316 2013 GMS Power (Thailand) 20% EDL
Statkraf 20%
EDL
9 Nam Ngiap 3A Nam Ngiap Khun Xiengkhwang 44 152 2014 TK construction
(IPP internal use)
10 Huai Lamphan Nyai Se Kong Thataeng Sekong 88 480 2015 EDL_GEN EDL
CWE (China) 90% EDL
11 Nam Ngiap 2 Nam Ngiap Phasai Xiengkhwang 180 732 2015
EDL_GEN 10% (IPP internal use)
EDL
12 Nam San 3B Nam San Thathom Saisombun 45 174 2015 Phongsapthawi construntion
(IPP internal use)
13 Nam Khan 2 Nam Khan Xieng Ngeun Luangphabang 130 538 2015 EDL_GEN EDL
China National Electrical Equipment
EDL
14 Nam Baeng Nam Baeng Hun Udomsai 36 145 2015 Corporation 80%
(IPP internal use)
EDL_GEN 20%
Sinohydro (China) 90% EDL
15 Nam Ou 2 Nam Ou Ngoi Luangphabang 120 548 2016
EDL_GEN 10% (IPP internal use)
Sinohydro (China) 90% EDL
16 Nam Ou 5 Nam Ou Samphan Phongsali 240 1,049 2016
EDL_GEN 10% (IPP internal use)
Sinohydro (China) 90% EDL
17 Nam Ou 6 Nam Ou Phongsali Phongsali 180 739 2016
EDL_GEN 10% (IPP internal use)
EDL
18 Nam San 3A Nam San Khun Xiengkhwang 69 278 2016 Phongsapthawi construntion
(IPP internal use)
Total 1,788 8,064
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
Table 3.2 shows the hydropower projects that are already operating and are less than 15 MW.
There are 13 plants, the total capacity is 67 MW, and the total annual energy is 342.41 GWh.
Table 3.2 Existing hydropower plants (less than 15 MW)
3-1
Annual
Capacity
No. Project Basin District Province Energy COD Developer Off-taker
[MW]
[GWh/y)]
19 Se Labam Se Don Sanasombun Champasak 5 21 1970 EDL_GEN EDL
20 Nam Dong Nam Khan Luangphabang Luangphabang 1 5 1970 EDL EDL
21 Nam Ko Nam Ou Sai, La Udonsai 2 8 1996 EDL EDL
MK Dynamic Resource
Development Co., Ltd 70% EDL
22 Nam Nyon Nam Nyon Huaisai Bokaeo 3 12 2011
CMC Engineering Co., Ltd 20% (IPP internal use)
Giant Billion Overseas Inc 10%
Simuang Group 87% EDL
23 Nam Phao Nam Theun Khamkoet Bolikhamsai 2 9 2011
Phathana Khet Phudoi 13 (IPP internal use)
EDL
24 Nam Tha 3 Nam Tha Nam Tha Luang Namtha 1 6 2011 Huamchai Phathana
(IPP internal use)
25 Nam Song (Expansion) Nam Ngeum Vang Viang Vientiane 6 25 2012 EDL_GEN EDL
EDL
26 Tat Salaen Se Banghiang Sepon Sawannakhet 3 17 2012 SIC Manufacturer (Thailand) 100%
(IPP internal use)
Nam Long Power 80% EDL
27 Nam Long Nam Ma Long Luang Namtha 6 37 2013
Lao Government 20% (IPP internal use)
EDL
28 Se Namnoi Se Kong Paksong Attapeu 15 101 2013 TK Construction
(IPP internal use)
EDL
29 Nam Saen (Tat Lang) Nam Ngiap Phasai Xiengkhwang 5 25 2014 Bo Thong Inter
(IPP internal use)
30 Nam Sana Nam Ngeum Vang Viang Vientiane 14 50 2014 EDL_GEN EDL
EDL
31 Se Namnoi 6 Se Kong Paksong Champasak 5 27 2016 Phongsapthawi Construction
(IPP internal use)
Total 67 342
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-2
Source: Updated Hydro Power List - June 2016 (MEM)
3-3
2) Hydropower projects under construction
Table 3.3 shows the hydropower projects under construction that are over 15 MW.
There are 21 plants, the total capacity is 2,596 MW, and the total annual energy is 11,677 GWh.
Table 3.3 Hydropower projects under construction (over 15 MW)
Capacity Annual energy Expected
No. Project Basin District Province Developer Off-taker Status
[MW] [GWh/y] operation year
EDL
1 Nam Kong 2 Se Kong Phu Wong Attapeu 66 263 2016 TK Construction 99%
(IPP internal use)
2 Se Set 3 Se Kong Paksong Salawan 23 82 2016 EDL EDL 86.43%
3 Nam Khan 3 Nam Khan Xieng Ngeun Luang Phabang 60 240 2016 EDL EDL 95%
Dongfang 75%
A&C 10.75% EDL
4 Nam Mang 1 Nam Mang Longsan Saisombun 64 445 2016 87%
EDL 10% (IPP internal use)
Saitha 4.25%
5 Nam Hinbun Nam Hinbun Hinbun Khammuan 30 197 2017 EDL EDL 99%
6 Nam Jae Nam San Khun, Thathom Saisombun 104 448 2017 EDL EDL 76%
HEC 40%
GPSC 40% EDL
7 Nam Lik 1 Nam Ngeum Hinhoep Vientiane 64 256 2017 39.90%
EDL 10% (IPP internal use)
POSCO 10%
Nam Ngeum 1 EDL
8 Nam Ngeum Kaeoudom Vientiane 80 61 2017 EDL 44.37%
expansion(Phase 1) (Loan from China Gov.)
Norinco International Corporation
EDL
9 Nam Phai Nam Ngeum Saisombun Saisombun 86 420 2017 85% 80.26%
(IPP internal use)
EDL 15%
China Southern Grid Co.,Ltd 80% EDL
10 Nam Tha 1 Nam Tha Pha Udom Bo Kaeo 168 759 2018 27%
EDL 20% (IPP internal use)
Houang Anh Gialai 80% EDL
11 Nam Kong 3 Se Kong Phu Wong Attapeu 45 170 2019 preparing for const.
EDL 20% (IPP internal use)
Mega First (Malaysia) 80% EDL
12 Don Sahong Nam Khong Khong Champasak 260 2,009 2019 8.80%
GOL 20% (IPP internal use)
Kansai Electric (Japan) 45%
EGAT Inter 30% EDL
13 Nam Ngiap 1(under dam) Nam Ngiap Bolikhan Bolikhamsai 18 105 2019 38%
LHSE 25% (IPP internal use)
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-4
Table 3.4 shows the hydropower projects under construction that are less than 15 MW. They are expected to start operation up
to 2020.
There are 23 plants, the total capacity is 258 MW, and the total annual energy is 1,299 GWh.
Table 3.4 Hydropower projects under construction (less than 15 MW)
Capacity Annual energy Expected
No. Project Basin District Province Developer Off-taker Status
[MW] [GWh/y] operation year
MECAMIDI-NORPOWER AS
EDL
22 Nam Sim Nam Sim Viangsai Huaphan 9 32 2017 75% 91%
(IPP internal use)
ECI (Laos) 25%
EDL
23 Nam Nga 2 Nam Ou Nga Udomsai 15 63 2017 Heuangpasoet 66.90%
(IPP internal use)
EDL
24 Nam Ngiap 2C Nam Ngiap Khun Xiengkhwang 15 33 2017 Nonghai Construction 79%
(IPP internal use)
EDL
25 Nam Poen 2 Nam Noen Huameuang Huaphan 12 115 2017 Nyot Chaloen 52%
(IPP internal use)
EDL
26 Se Katam 1-Se Namnoi 2 Se Kong Paksong Champasak 13 79 2017 Faifa Se Katam 1- Se Namnoi 2 60%
(IPP internal use)
EDL
27 Huai Chiat Se Don Paksong Champasak 8 39 2017 Champa 20%
(IPP internal use)
EDL
28 Huai Nyoi-Huai Khot Se Don Paksong Champasak 15 78 2018 Faifa Huai Nyoi-Huai Khot constructing road
(IPP internal use)
EDL
29 Nam Hao Nam Ma Sopbao Huaphan 15 173 2018 Duangchaloen 14.40%
(IPP internal use)
EDL
30 Nam Hung 1 Nam Hung Sainyabuli Sainyabuli 13 50 2018 Simeuang Group 14.40%
(IPP internal use)
EDL
31 Nam Phanyai Nam Ngeum Long Chaeng Saisombun 14 48 2018 DSK (Lao) 45%
(IPP internal use)
EDL
32 Nam Poen 1 Nam Noen Huameuang Huaphan 15 72 2018 Phongsapthawi Construction 70%
(IPP internal use)
EDL
33 Nam Mon Nam Noen Huameuang Huaphan 10 74 2018 Phongsapthawi Construction 10%
(IPP internal use)
EDL
34 Huai Po Se Don Lao Ngam Salawan 15 60 2018 Huai Por Power Co., Ltd 59%
(IPP internal use)
EDL
35 Nam Keun Nam Ngeum Paek Xiengkhwang 1 2018 Somphu Construction PDA 19/4/2013
(IPP internal use)
EDL
36 Nam Ngiap 2A Nam Ngiap Khun Xiengkhwang 13 71 2019 Nonghai Construction SHOA 23/4/2013
(IPP internal use)
EDL
37 Nam Ngiap 2B Nam Ngiap Khun Xiengkhwang 9 32 2019 Nonghai Construction SHOA 23/4/2014
(IPP internal use)
EDL PDA 30/1/2014
38 Nam Thae Nam Maet Kham Xiengkhwang 15 50 2019 Nonghai Construction
(IPP internal use) (constructing road)
EDL
39 Nam Mat 1 Nam Noen Nong Haet Xiengkhwang 15 45 2019 Lao Samphan Phathana PDA 19/4/2013
(IPP internal use)
EDL
40 Nam Mat 2 Nam Noen Nong Haet Xiengkhwang 15 2019 Lao Samphan Phathana PDA 19/4/2013
(IPP internal use)
EDL
41 Nam Huai Nam Mo Nong Haet Xiengkhwang 7 30 2019 Lao Samphan Phathana PDA 19/4/2013
(IPP internal use)
EDL
42 Se Set-Kaeng San Se Set Salawan Salawan 13 43 2019 Se Set Huai Tapung Power PDA 25/2/2013
(SPP internal use)
EDL
43 Nam Ngao Nam Nga Huaisai Bo Kaeo 15 58 2020 Heuangpasoet Hydro Power preparing construction
(SPP internal use)
Nam Tha-Hat Muak Hydro EDL
44 Nam Tha (Ban Hat Muak) Nam Tha Phaudom Bo Kaeo 15 57 2020 preparing construction
Power (SPP internal use)
Total 258 1,299
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-5
Figure 3.2 shows the locations of hydropower projects under construction with COD expected by 2020.
Figure 3.2 Locations of hydropower projects under construction with COD expected by 2020.
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
Table 3.6 shows the hydropower projects with COD expected by 2025 that are less than 15 MW.
There are 15 plants, the total capacity is 133 MW, and the total annual energy is 517 GWh.
Table 3.6 Hydropower projects with COD expected by 2025 (less than 15 MW)
Capacity Annual energy
No. Project Basin District Province Developer Status
[MW] [GWh/y]
19 Nam Pung Lo Nam Pung Lo Meung Bo Kaeo 5 19 Saiphachan Construction MOU
20 Nam Dik 1 Samtai Huaphan 15 79 Nesoenaeu Consulting Group SHOA 24/2/2015
21 Nam Dik 2 Kuwan Huaphan 15 78 Nesoenaeu Consulting Group SHOA 24/2/2015
22 Nam Dik 3 Kuwan Huaphan 10 56 Nesoenaeu Consulting Group SHOA 24/2/2015
23 Nam Chat 2 Nam Ngeum Phukut Xiengkhwang 8 25 Lao-Asia Consultant Group PDA 1/4/2014
24 Nam Chae 1 Nam San Thathom Saisombun 5 17 Hydro Lao PDA 1/12/2015
25 Nam Chae 2 Nam San Thathom Saisombun 8 26 Hydro Lao PDA 1/12/2016
26 Nam Samoi Nam Ngeum Kasi Vientiane 5 28 Nam Samoi Hydro Power SHOA
27 Nam Chat 1 Saichamphon Bolikhamsai 15 74 Duangchaloen Phathana SHOA 14/8/2014
28 Huan Palai Lower Se Don Bachiangchaloensuk Champasak 4 16 Palai Dam Electric MOU 7/1/2011
29 Huai Champi Lak35 Se Don Paksong Champasak 5 26 Pasakon Construction MOU 18/5/2015
30 Huai Kaphoe Se Don Lao Ngam Salavan 5 23 Huai Kaphoe Power SHOA 30/4/2012
PDA 29/5/2015
31 Huai Yuang Upper Huan Yuang Dak Cheung Se Kong 6 Hongkham Construction
preparing for construction
PDA 13/9/2010
32 Huan Lamphan Lower Huan Lamphan Lamam Se Kong 15 Vientian Automation
preparing for construction
EDL_GEN
33 Nam Bi 3 Se Kong Dak Cheung Se Kong 12 51 preparing for PDA
Chanthawon Construction
Total 133 517
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-7
Figure 3.3 shows the locations of hydropower projects with COD expected by 2025.
Figure 3.3 Locations of hydropower projects with COD expected by 2025
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-9
Table 3.8 shows the hydropower projects with COD expected by 2030 that are less than 15 MW.
There are 34 plants, the total capacity is 269 MW, and the total annual energy is 511 GWh.
Table 3.8 Hydropower projects with COD expected by 2030 (less than 15 MW)
Annual
Capacity
No. Project Basin District Province energy Developer Status
[MW]
[GWh/y]
MOU 20/8/2013
24 Nam Hun 1 Nam Ou Samphan Phongsali 15 Duangchaloen Phathana
FS completed
25 Nam Long 2 Nam Ma Long Luang Namtha 11 92 Nam Long Power MOU 4/11/2011
26 Nam Talan Luang Namtha Luang Namtha 5 30 Saiphachan MOU 28/8/2013
27 Nam Long Nam Ma Sopbao Huaphan 13 Bukthalu MOU 9/11/2012
PEA Encom 67%
MOU 6/5/2005
28 Nam Ham 2 Nam Heuang Botaen Sainyabuli 5 16 EDL 30%
FS, EIAcompleted
Cobrie 3%
MOU 27/4/2012
29 Nam Hung 2 Nam Hung Sainyabuli Sainyabuli 5 23 Phanthamit Phathana
FS, EIAcompleted
MOU 21/9/2012
30 Nam Maet 1 Nam Hung Sainyabuli Sainyabuli 3 13 Phanthamit Phathana
FS, EIA completed
MOU 6/9/2013
31 Nam Sing Nam Phun Hongsa Sainyabuli 5 31 Ketmani
FS, EIA completed
32 Nam Ao Nam Maet Kham Xiengkhwang 15 Bothong Inter PDA 19/10 2015
33 Nam Khao 1 Nam Maet Kham Xiengkhwang 5 SV Group PDA 12/11/2015
34 Nam Khao 2 Nam Maet Kham Xiengkhwang 5 SV Group PDA 12/11/2015
35 Nam Khao 3 Nam Maet Kham Xiengkhwang 5 SV Group PDA 12/11/2015
36 Nam Khao 4 Nam Maet Kham Xiengkhwang 5 SV Group PDA 12/11/2015
37 Nam Khao 5 Nam Maet Kham Xiengkhwang 5 SV Group PDA 12/11/2015
38 Nam Hong Nam Mo Mok Xiengkhwang 5 7 Huaisuwan Lao PDA 25/5/2016
39 Nam So Nam Kading Wiangthong Bolikhamsai 4 19 Vientiane Techno preparing SHOA
Small Dam & Irrigation
40 Nam Hinbun Hinbun Khammuan 5 Phalangngan Lasita PDA 1/6/2016
(Lower)
41 Kaeng Soi Se Bangfai Khammuan Khammuan 15 Phosi Construction PDA 12/2/2016
42 Huai Bangliang Lower Bangliang Paksong Champasak 11 45 Mae Khong Concrit IPP internal use
Huai Champi
43 Se Don Bachiang Chaloensuk Champasak 5 23 STL IPP internal use
Khamnosaeb
IPP internal use
44 Huai Champi Udomsuk Se Don Bachiang Chaloensuk Champasak 5 28 Daoheuangsong
SHOA 6/7/2009
IPP internal use
45 Huai Namphak Lower Bangliang Pathunphon Champasak 9 39 Daoheuangsong
SHOA 23/11/2012
IPP internal use
46 Se Namnoi 5 Se Kong Paksong Champasak 5 23 KTX Phathana Phalangngan (less than 1% constructed)
SHOA 30/11/2009
47 Se Set 4 Se Kong Paksong Champasak 10 110 EDL
Huai Namsai 1
48 Se Don Salawan Salawan 6 PCC Construction PDA 6/3/2013
(Tat Kaloei)
49 Huai Lai Se Banghiang Taoi Salawan 3 12 P & P Construction PDA 23/5/2014
50 Huai Phok Se Kong Samakhisai Attapeu 12 Hydro Lao
51 Huai Sanong Sanamsai Attapeu 1 Satsada
52 Nam Su Sansai Attapeu 7 Maek Electric Lao
53 Se Su 4 Sanamsai, Phuwong Attapeu 13 Maek Electric Lao
54 Huai Chaliu 1 Huai Chaliu Dak Cheung Se Kong 11 Vientiane Automation PDA 24/6/2012
55 Huai Chaliu 2 Huai Chaliu Dak Cheung Se Kong 13 Vientiane Automation PDA 24/6/2012
56 Huai Panyu Lower Nam Panyu Dak Cheung Se Kong 15 Vientiane Automation PDA 17/5/2012
MOU 17/6/2015
57 Huai Pet Huai Pet Lamam Se Kong 13 DMD Phathana
MOU being negotiated again
Total 269 511
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
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5) Hydropower projects with signed MOU
Table 3.9 shows the hydropower projects for which an MOU has already been acquired but COD is undetermined, and which
have a capacity of over 15 MW.
There are 40 plants, the total capacity is 5,383 MW, and the total annual energy is 23,898 GWh.
Table 3.9 Hydropower projects with signed MOU (over 15 MW)
Capacity Annual energy
No. Project Basin District Province Developer Status
[MW] [GWh/y]
1 Se Pian-Huai Chot Se Kong Paksong Champasak 21 100 CLM & LEADER infrastructure MOU 20/12/2012
EDL
2 Se Pon 3 Se Banghiang Samuai Salawan 47 167 MOU 21/5/2015
Korea Water Resource Corporation
3 Se Don Se Don Wapi Salawan 20 80 EDL
MOU 11/4/2012
4 Nam Nga 1 Nam Ou Nam Bak Luangphabang 62 266 Duangchaloen 1st extension 10/10/2013
2nd extension 18/11/2016
MOU 16/5/2006
5 Se Neua Se Bangfai Bualapha Khammuan 53 209 Phonsak Group
1st extension 16/1/2010
6 Nam Theun 4 Kading Khamkoet Bolikhamsai 80 300 SSPT MOU 26/6/2013-12/5/2014
7 Se Lanong 2 Se Banghiang Taoi Salawan 35 143 China Gezhouba Groip MOU 11/7/2012
MOU 31/1/2014
8 Se Pian-Huai Soi Se Kong Sanamsai Attapeu 60 229 DMD
1st extension 21/9/2015
MOU 22/5/2013-
9 Ban Wangdeua-Nam Muan Kading Wiangthong Bolikhamsai 66 140 Phonsak Group
21/11/2014
10 Nam Seuang 4 Nam Seuang Pak Saeng Luangphabang 42 147 China Sichuan Gurong Group MOU 9/9/2013
11 Nam Seuang 5 Nam Seuang Wiangkham Luangphabang 47 156 China Sichuan Gurong Group MOU 9/9/2013
12 Nam Seuang 6 Nam Seuang Pak Saeng Luangphabang 72 242 China Sichuan Gurong Group MOU 9/9/2013
13 Se Kong 3A Se Kong Lamam Attapeu 105 411 Asia Longtheun Development MOU 31/3/2015
14 Se Kong 3B Se Kong Saisetha Attapeu 100 394 Asia Longtheun Development MOU 31/3/2015
15 Se Kong Lower B Se Kong Samakhisai Attapeu 50 206 V & H Corporation MOU 29/11/2011
16 Huai Langae Se Kong Kaleum Se Kong 60 294 Chiantho MOU 21/7/2015
MOU 25/2/2010-24/8/2011
17 Nam Ngiap-Meuang Mai Nam Ngiap Bolikhan Bolikhamsai 25 60 Phongsapthawi
1st extension 25/2/2012
18 Nam Sam 4 Nam Sam Sam Neua Huaphan 150 343 Simon Consulting MOU 21/3/2013
Hoang Anh Gia Lai Mineral Joint MOU 10/9/2011
19 Se Su Se Kong Saisetha Attapeu 30 126
Stock Company Last extension -10/3/2013
20 Se Tanuan Se Banghiang Phin Sawannakhet 35 143 China Gezhouba Groip MOU 11/7/2012-10/1/2014
21 Nam Feuang Nam Feuang Maet Vientiane 51 242 Syntec Construction Public Company MOU 14/8/2013
MOU 1/7/2013-2/4/2015
22 Se lanong 3 Ban Tang Oen Se Banghiang Nong Sawannakhet 80 400 Simeuang Group
1st extension -8/1/2016
23 Se Kong 5 Se Kong Kaleum Se Kong 330 1,613 Inter RAO-Engineering (Russia) MOU 5/2/2014-5/8/2015
24 Nam Khan 4 Nam Khan Phukhun Luangphabang 64 258 Duangpasoet MOU 2/9/2013
Sinwoesaen Group
25 Nam Ngeum Nam Ngeum Ngoen, Hongsa Sainyabuli 44 296 MOU 20/6/2013
Saiphon Electric
MOU 10/6/2014-
26 Nam Ma 1 Nam Ma Siengkho Huaphan 44 200 Guangdong Electric Company
10/12/2015
MOU 10/6/2014-
27 Nam Ma 1A Nam Ma Siengkho Huaphan 39 156 Guangdong Electric Company
10/12/2015
MOU 10/6/2014-
28 Nam Ma 2 Nam Ma Siengkho Huaphan 30 118 Guangdong Electric Company
10/12/2016
MOU 10/6/2014-
29 Nam Ma 2A Nam Ma Siengkho Huaphan 18 74 Guangdong Electric Company
10/12/2017
MOU 10/6/2014-
30 Nam Ma 3 Nam Ma Siengkho Huaphan 18 76 Guangdong Electric Company
10/12/2018
Italian Thai MOU 25/3/2008-25/9/2010
31 Ban Kum (Nam Khong) Nam Khong Phonthong Champasak 1,872 8,433
Asia Corp Holdings Limited 1st extension -25/9/2011
MOU 13/10/2007-
10/4/2010
32 Luangphabang (Nam Khong) Nam Khong Chomphet Luangphabang 1,200 6,500 Petro Vietnam Power Corporation
1st extension 13/10/2010
2nd extension 13/10/2011
33 Pak Ngeum Nam Ngeum Pak Ngeum Nakhonluang Vientiane 110 463 Vientiane Automation MOU 1/9/2015
34 Nam Tha 2 Nam Tha Luang Namtha Luang Namtha 25 149 Huamchai Phathana MOU 9/7/2015
35 Nam Cha 2 Nam Ngeum Saisombun Saisombun 40 205 Namtha Construction MOU 4/9/2015
Venture Capital and Equipment Inc.
36 Nam Mang (upper) Saisombun 50 MOU 27/5/2015
(Vietnam)
37 Se Bangnuan 2 Salawan 80 290
38 Se Banfai Kaeng Kaeo Saibuli Sawannakhet 63 271 Laosamai Group MOU 13/11/2015
39 Nam Ngorn 1,2 Se Kong 30 Phongsapthawi MOU 30/3/2016
40 Nam Hong Bolikhamsai 35 Nalinni Thachaloensai MOU 19/5/2016
Total 5,383 23,898
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-11
Table 3.10 shows the hydropower projects for which an MOU has already been acquired but COD is undetermined, and which
have a capacity of less than 15 MW.
There are 193 plants, the total capacity is 1,823 MW, and the total annual energy is 3,777 GWh.
Table 3.10 Hydropower projects with signed MOU (less than 15 MW)
Capacity Annual energy
No. Project Basin District Province Developer Status
[MW] [GWh/y]
41 Nam Ou 8 Nam Ou Nyot Ou Phongsali 15 60 Heuangpasoet MOU 5/7/2012
42 Nam Nua Nam Ma Mai Phongsali 15 Heuangpasoet MOU 8/5/2013
43 Nam Hun 2 Nam Ou Samphan Phongsali 15 55 Duangchaloen Phathana MOU 20/8/2013
44 Nam Hun 3 Nam Ou Samphan Phongsali 15 60 Duangchaloen Phathana MOU 20/8/2013
45 Nam Bun 2 Nam Ou Bun Neua Phongsali 15 Lai Engineering MOU 16/9/2013
46 Nam Phae Nam Ou Phongsali Phongsali 13 45 Phosi Construction MOU 17/9/2013
47 Nam Ban Nam Ou Mai Phongsali 12 45 Lat Wisahakit (ECI) MOU 29/4/2014
48 Nam Moek Nam Ou Mai Phongsali 10 35 Lat Wisahakit (ECI) MOU 29/4/2014
49 Nam Talan Nam Tha Luang Namtha Luang Namtha 15 80 Saiphachan MOU 28/8/2013
50 Nam Fa 2 Nam Fa Wiangphukha Luang Namtha 180 424 Huamchai Phathana MOU 5/8/2014
51 Nam Ngao Nam Ngao Huaisai Bokaeo 15 85 Saisombun Construction MOU 10/12/2014
52 Nam Ngao 2 Nam Ngao La Udomsai 8 DPS MOU 25/3/2011
Nam Ko lower (Ban
53 Nam Ou La Udomsai 10 50 MP MOU 16/8/2013
Phonsawang)
54 Nam Ko lower (Ban Huaisang) Nam Ou La Udomsai 10 50 Wiang Electronic MOU 4/2/2013
55 Nam Ngao 1 Nam Ou Nga Udomsai 12 53 M Consulting MOU 25/4/2014
56 Huai Prong Nam Ou Nga Udomsai 2 Phisitsaisombat MOU 23/2/2016
57 Nam Ma Nam Noen Kham Xiengkhwang 5 Sonsana Construction MOU 28/7/2011
58 Nam Khan 4 Nam Ngeum Phukut Xiengkhwang 15 Bosaikham Phathana MOU 1/11/2013
59 Nam Phang 1 Nam Ngiap Khun Xiengkhwang 3 Bosaikham Phathana MOU 12/5/2013
60 Nam Ngan Nam Ngiap Khun Xiengkhwang 5 15 Bosaikham Phathana MOU 12/5/2013
61 Tat Kha Nam Mo Nonghaet Xiengkhwang 5 Bosaikham Phathana MOU 12/5/2013
62 Nam Khan 3A Nam Ngeum Phukut Xiengkhwang 15 Bosaikham Phathana MOU 4/7/2014
63 Nam Khan 3B Nam Ngeum Phukut Xiengkhwang 15 Bosaikham Phathana MOU 14/1/2014
64 Nam Hang Nam Ngeum Phukut Xiengkhwang 5 Suksomwang MOU 17/12/2014
65 Nam Sannoi Nam Ngiap Khun Xiengkhwang 5 Suksomwang MOU 17/12/2014
66 Nam Noen (lower) Nam Mo Nonghaet Xiengkhwang 15 70 Songhua FIM MOU 10/3/2014
67 Nam Lan 1 Nam Mo Nonghaet Xiengkhwang 5 SN Energy MOU 21/9/2015
68 Nam Lan 2 Nam Mo Nonghaet Xiengkhwang 5 SN Energy MOU 21/9/2015
69 Nam Lan 3 Nam Mo Nonghaet Xiengkhwang 5 SN Energy MOU 21/9/2015
70 Nam Chat 1 Nam Ngeum Phukut Xiengkhwang 15 Wisawakam Construction MOU 25/5/2015
71 Nam Sui Nam Ngeum Phukut Xiengkhwang 4 Somphu Construction MOU 21/8/2015
72 Nam Khao Ban Tha Nam Noen Kham Xiengkhwang 5 Phanthawong MOU 7/1/2015
73 Nam Siam Nam Ngiap Phasai Xiengkhwang 5 65 Lansang MOU 20/1/2015
74 Nam Khao Ban Sop O Nam Maet Kham Xiengkhwang 5 Phanthawong MOU 7/1/2015
75 Nam Wang Ban Na Luang Nam Maet Kham Xiengkhwang 12 44 Phanthawong MOU 7/1/2015
76 Nam Keun Nam Khan Phukut Xiengkhwang 9 Phanthawong MOU 7/1/2015
77 Nam Khian Nam Mo Nonghaet Xiengkhwang 9 30 Phanthawong MOU 7/1/2015
78 Nam Khian Nam Mo Nonghaet Xiengkhwang 15 SDS Group MOU 25/5/2015
79 Nam Keua Nam Maet Kham Xiengkhwang 12 Phanthawong MOU 7/1/2015
80 Nam Siam (lower) Nam Khan Phukut Xiengkhwang 5 Wisawakam Construction MOU 20/1/2015
81 Nam Chat Nam Mo Mok Xiengkhwang 1 Ongkham Gold Mining
82 Nam Siam (upper) Nam Ngiap Phasai Xiengkhwang 4 DMD MOU 17/3/2015
83 Nam Sao 1 Nam Mo Mok Xiengkhwang 3 Phongsapthawi 13/7/2015
84 Nam Sao 2 Nam Mo Mok Xiengkhwang 3 Phongsapthawi 13/7/2015
85 Nam Sao 3 Nam Mo Mok Xiengkhwang 3 Phongsapthawi 13/7/2015
86 Nam Sao 4 Nam Mo Mok Xiengkhwang 3 Phongsapthawi 13/7/2015
87 Nam Sao 5 Nam Mo Mok Xiengkhwang 3 Phongsapthawi 13/7/2015
88 Nam Ao Nam Ngiap Phasai Xiengkhwang 15 Bothong Inter 9/4/2015
89 Nam Keun Nam Mo Nonghaet Xiengkhwang 8 34 Bosaikham Phathana 10/4/2015
90 Nam Ngeum Nam Khan Phukut Xiengkhwang 4 Thinthong Phathana MOU 12/1/2016
91 Nam Mang Nam Mo Mok Xiengkhwang 5 Sipannya Construction MOU 19/2/2016
92 Nam Hok Nam Mo Mok Xiengkhwang 5 Sipannya Construction MOU 19/2/2016
93 Nam Iyam Nam Mo Mok Xiengkhwang 5 Sipannya Construction MOU 19/2/2016
94 Nam Kam Nam Ngiap Phasai Xiengkhwang 5 Khamson Phathana MOU 19/2/2016
95 Nam Thong Nam Ngiap Phasai Xiengkhwang 5 Khamson Phathana MOU 19/2/2016
96 Nam Poe Nam Mo Mok Xiengkhwang 5 Thewan Construction MOU 25/5/2016
97 Nam Tak Nam Mo Mok Xiengkhwang 5 Thewan Construction MOU 25/5/2016
98 Nam Khom Nam Mo paek Xiengkhwang 5 Somphu Construction
99 Nam Sam Nam Maet Kham Xiengkhwang 5 Somphu Construction
100 Nam Ngeum Kaeng Khwan Nam Maet Paek Xiengkhwang 1 6 Somphu Construction
101 Nam Chao Nam Mo Mok Xiengkhwang 5 Phongsapthawi
102 Nam Chiat Nam Mo Mok Xiengkhwang 5 Phongsapthawi
103 Nam Liang Nam Mo Khun Xiengkhwang 5 Phongsapthawi
104 Nam Aet 4 Son Huaphan 19 76 EDL MOU 30/11/2012
105 Nam Aet 5 Son Huaphan 8 30 EDL MOU 30/11/2012
106 Nam Aet 6 Son Huaphan 2 7 EDL MOU 30/11/2012
107 Nam Pong Nam Khan Samneua Huaphan 9 Nak Kham 2010 MOU 31/10/2013
108 Nam Wang Nam Khan Hiam Huaphan 1 Saichaloen MOU 9/9/2014
109 Nma Khan Nam Khan Hiam Huaphan 15 Saichaloen MOU 9/9/2014
110 Nam Hang Nam Khan Hiam Huaphan 5 Saichaloen MOU 9/9/2014
111 Nam Noen 2 Nam Noen Huameuang Huaphan 5 Saichaloen MOU 9/9/2014
112 Nam Noen 4 Nam Noen Huameuang Huaphan 5 Saichaloen MOU 9/9/2014
113 Nam Poen 3 Nam Noen Huameuang Huaphan 5 Nyotchaloen MOU 20/10/2014
114 Nam Dang Nam Noen Huameuang Huaphan 5 Nyotchaloen MOU 20/10/2014
115 Nam Yeuang 1 Huaphan 15 250 SV Group MOU 21/9/2015
116 Nam Yeuang 2 Huaphan 15 110 SV Group MOU 21/9/2015
117 Nam Yeuang 3 Huaphan 15 150 SV Group MOU 21/9/2015
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-12
Table 3.10 Hydropower projects with signed MOU (less than 15 MW) (cont.)
118 Nam Sam 2 Samtai Huaphan 15 Phongsapthawi MOU 14/12/2015
119 Nam Taep Nam Khan Samtai Huaphan 5 Longchaeng Phathana MOU 31/3/2016
120 Nam Bak Nam Ou Nam Bak Luang Phabang 15 DSK MOU 8/4/2010
121 Nam Mat Nam Khan Phonthong Luang Phabang 15 Siluangphabang MOU 10/1/2013
122 Nam Saeng Nam Khan Paksaeng Luang Phabang 15 Phusi Luangphabang Construction MOU 10/1/2013
123 Nam Mi Nam Seuang Wiangkham Luang Phabang 15 Phusi Luangphabang Construction MOU 10/1/2013
124 Nam Saeng Nam Feuang Nan Luang Phabang 15 EDL MOU 17/11/2014
125 Nam Sanan Nam Khan Sieng Ngeun Luang Phabang 15 Phusi Luangphabang Construction MOU 23/2/2015
126 Nam Ming 1 Nam Ming Sieng Ngeun Luang Phabang 15 EDL MOU 30/11/2015
127 Nam Ming 2 Nam Ming Sieng Ngeun Luang Phabang 15 EDL MOU 9/2/2016
128 Nam Pui (Ban Paksong) Nam Pui Phiang Sainyabuli 5 Kaeochaloen Construction MOU 31/7/2012
129 Nam Ngeum 2 Nam Ngeum Ngoen-Sienghon Sainyabuli 5 Hai Engineering MOU 28/6/2012
130 Nam Nyang Nam Khan Ngoen Sainyabuli 5 DM MOU 12/9/2012
131 Nam Hung 3 (Kaeng Phoeng) Nam Hung Sainyabuli Sainyabuli 10 DM MOU 14/5/2015
132 Nam Sa Nyai Nam Ngeum Kasi Vientiane 3 14 Phathana Long Ngeum MOU 21/1/2011
133 Nam Kai Nam Ngeum Kasi Vientiane 3 8 Phadaeng Construction MOU 28/3/2011
134 Nam Ngeum Na Nin Nam Ngeum Wiangkham Vientiane 15 99 Vientiane Automation MOU 21/10/2011
135 Nam Lik (Kaeng Luang) 1/2A Nam Ngeum Kasi Vientiane 15 99 DMD MOU 6/11/2012
136 Nam Sanaen Nam Ngeum Wangwiang Vientiane 7 20 Phetthongkham MOU 16/11/2012
137 Nam Mon Nam Ngeum Wiangkham Vientiane 6 29 BML Construction MOU 22/3/2013
138 Nam Thaem Nam Ngeum Wangwiang Vientiane 4 20 Vientiane WERC MOU 2/7/2013
139 Nam Sana upper Nam Ngeum Kasi Vientiane 10 39 Nam Sanoi Hydro Power MOU 13/2/2013
140 Nam Sana under Nam Ngeum Kasi Vientiane 3 15 Kasi Hungheuangsap MOU 24/5/2013
141 Nam Feuang lower Nam Feuang Maet Vientiane 15 99 Buathip Lao MOU 16/9/2014
142 Nam Kaen upper Nam Ngoen Kasi Vientiane 2 Intracorporation MOU 29/1/2014
143 Nam Kaen lower Nam Ngoen Kasi Vientiane 3 Maisak Luangphabang MOU 13/12/2014
Nam Feuang Neua Khet Tham
144 Nam Feuang Kasi Vientiane 15 Thongkhunsap Mining Service MOU 30/12/2014
Thoep
145 Nam Po Nam Ngeum Wangwiang Vientiane 1 PCC Construction MOU 27/8/2015
146 Nam Kap Nam San Longchaeng Saisombun 12 55 Phongsapthawi MOU 5/2/2012
147 Nam Chae lower Nam San Thathom Saisombun 10 47 Thawisai Construction MOU 8/11/2012
148 Nam Tai Nam San Thathom Saisombun 5 19 Phongsapthawi MOU 23/10/2012
149 Nam Nyam Nam San Thathom Saisombun 8 17 DMD MOU 12/12/2012
150 Nam Pheuak Saisombun 10 32 NCG MOU 6/9/2013
151 Nam San Nam San Thathom Saisombun 5 17 Phongsapthawi MOU 23/10/2014
152 Nam Thong 1 Nam Ngiap Anuwong Saisombun 10 83 Wansana Songsoem Kasikam MOU 18/4/2014
153 Nam Thong 2 Nam Ngiap Anuwong Saisombun 5 44 Wansana Songsoem Kasikam MOU 18/4/2014
154 Nam Thaeng Nam Ngiap Anuwong Saisombun 5 17 Sisaket Construction MOU 6/5/2014
155 Nam Chang 4 Nam Ngiap Anuwong Saisombun 15 72 Asia Pacific MOU 5/8/2015
156 Nam Chang 5 Nam Ngiap Anuwong Saisombun 5 39 Asia Pacific MOU 5/8/2015
157 Nam Song Nam San Thathom Saisombun 7 27 Phongsapthawi MOU 23/1/2015
158 Nam San (Hat To) Nam San Bolikhan Bolikhamsai 15 90 Nalinnitha Chaloensai MOU 26/10/2012
159 Nam Hoeng Kading Saichamphon Bolikhamsai 13 50 VSK MOU 18/3/2013
160 Nam Hong Kading Wiangthong Bolikhamsai 14 60 Nalinnitha Chaloensai MOU 1/2/2013
161 Nam Chat 2 Kading Saichamphon Bolikhamsai 15 68 Kaeodawon MOU 9/9/2013
162 Nam San 1 Nam San Bolikhan Bolikhamsai 7 Intra Corp MOU 28/1/2013
163 Nam San 2 Nam San Bolikhan Bolikhamsai 7 62 SPS MOU 15/5/2014
164 Nam Hong upper Kading Wiangthong Bolikhamsai 12 LBSS MOU 4/9/2014
165 Nam Sang Kading Wiangthong Bolikhamsai 15 62 Chaloensap Khopwongchon MOU 31/12/2014
166 Nam Toeng Kading Saichamphon Bolikhamsai 13 42 Chaloensap Khopwongchon MOU 31/12/2014
167 Huai Sai Nam Khong Kading Saichamphon Bolikhamsai 14 48 Chaloensap Khopwongchon MOU 31/12/2014
168 Nam Nyong Kading Thaphabat Bolikhamsai 14 Sukkhasoem Construction MOU 12/1/2015
169 Nam Kang Kading Wiangthong Bolikhamsai 5 Khamkhun Group MOU 3/3/2015
170 Nam Lo Kading Thaphabat Bolikhamsai 5 Phetbangdit Group MOU 28/1/2015
171 Nam Nyala Kading Saichamphon Bolikhamsai 5 Chaloensap Khopwongchon MOU 4/4/2016
172 Nam Mang Nam san Bolikhan Bolikhamsai 4 Chaloensap Khopwongchon MOU 2/3/2016
173 Huai Nam Thwai Kading Thaphabat Bolikhamsai 4 Chaloensap Khopwongchon MOU 4/4/2016
174 Huai Nam Cham Kading Saichamphon Bolikhamsai 2 Chaloensap Khopwongchon MOU 4/4/2016
175 Huai Nam Chuwan Kading Wiangthong Bolikhamsai 15 Chaloensap Khopwongchon MOU 4/4/2016
176 Huai Nam Pan Kading Saichamphon Bolikhamsai 15 Chaloensap Khopwongchon MOU 4/4/2016
177 Nam Senoi Se Bangfai Se Bangfai Khammuan 5 Namsok Samluat Seni Dam MOU 13/5/2011
Ban Kaeng Yaluwan (Se
178 Se Bangfai Bualapha Khammuan 15 SKSK MOU 14/1/2012
Bangfai)
Heuangsi Construction
179 Nam Kwang Nam Thoen Nakai Khammuan 8 24 MOU 27/5/2015
Hungheuang Chaloensap
180 Sai Nam Hai Se Bangfai Khunkham Khammuan 15 Atlantic International MOU 7/4/2016
181 Se Kok 1 Se Banghiang Se Pon Sawannakhet 6 Khunsai Phathana MOU 9/1/2014
182 Se Kok 2 Se Banghiang Se Pon Sawannakhet 5 Khunsai Phathana MOU 9/1/2014
183 Se Sangi 1 Se Banghiang Se Pon Sawannakhet 3 Khunsai Phathana MOU 9/1/2014
184 Se Sangi 2 Se Banghiang Se Pon Sawannakhet 2 Khunsai Phathana MOU 9/1/2014
185 Se Sangi 3 Se Banghiang Se Pon Sawannakhet 13 Khunsai Phathana MOU 9/1/2014
186 Se Banghiang upper Se Banghiang Se Pon Sawannakhet 10 64 Khunsai Phathana MOU 9/1/2014
187 Se Lanong Kaeng Asing Se Banghiang Nong Sawannakhet 15 SV Group MOU 11/1/2014
Nam Se Pon (Ban
188 Se Banghiang Se Pon Sawannakhet 15 Kham Wiang Ngam MOU 29/1/2014
Kaengluang)
189 Huai Champi Nong Kang Se Don Paksong Champasak 8 46 Bolihan Phalangngan Pen Loet MOU 18/10/2013
Bachiangchaloen
190 Huai Kaphoe 2 Se Don Champasak 6 39 LTV Construction MOU 15/5/2015
suk
191 Se Namnoi 4 Se Kong Paksong Champasak 5 28 LTV Construction MOU 3/7/2015
192 Huai Salai Se Banghiang Taoi Salawan 5 22 P & P Construction MOU 11/6/2013
193 Huai Nam Sai 2 (Kaeng Tung) Se Don Salawan Salawan 5 25 SDS Coffee MOU 7/1/2013
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-13
Table 3.10 Hydropower projects with signed MOU (less than 15 MW) (cont.)
Capacity Annual energy
No. Project Basin District Province Developer Status
[MW] [GWh/y]
194 Huai Awian Se Banghiang Samuai Salawan 5 25 Chanthasen Construction MOU 13/3/2014
195 Huai Kantrong Se Banghiang Samuai Salawan 5 25 SPS Coffee MOU 12/12/2014
196 Se Lanong 3 Se Banghiang Taoi Salawan 12 53 Phathana Sakon Huisuwan Lao MOU 21/6/2013
197 Nam Thwai Se Kong Sansai Attapeu 2 Satsada Electric MOU 30/3/2013
198 Nam Pa upper Se Kong Sansai Attapeu 3 Satsada Electric MOU 30/3/2013
199 Nam Pa lower Se Kong Sansai Attapeu 4 Satsada Electric MOU 30/3/2013
200 Huai Toklok Se Kong Sanamsai Attapeu 5 Pasansok MOU 21/7/2010
201 Nam Ka Uwan Se Kong Phuwong Attapeu 15 Phongsapthawi MOU 13/5/2011
202 Se Pian lower Se Kong Samakhisai Attapeu 15 Samliam Sethakit MOU 29/9/2011
203 Huai Paluat 1 Se Kong Sansai Attapeu 12 50 Samliam Sethakit MOU 22/12/2012
204 Huai Paluat 2 Se Kong Sansai Attapeu 12 55 Samliam Sethakit MOU 22/12/2012
205 Nam Pin Se Kong Sanamsai Attapeu 12 Asian Power Grit MOU 9/4/2014
206 Huai Toklok Se Kong Sanamsai Attapeu 5 Pasansok MOU 21/7/2010
207 Se Su upper Se Kong Phuwong Attapeu 15 Inpaeng MOU 30/3/2013
208 Se Su middle Se Kong Phuwong Attapeu 15 Sawan construction MOU 9/8/2013
209 Se Su lower Se Kong Saisetha Attapeu 15 Phosi Construction MOU 5/8/2014
MOU 27/6/2012
210 Huai Puang Se Kong Dak Cheung Se Kong 6 Hongkham Construction
preparing for 2nd extension
211 Nam Nyoeng 5 Se Kong Dak Cheung Se Kong 12 MP MOU 2/5/2014
212 Nam Nyoeng 7 Se Kong Dak Cheung Se Kong 15 MP MOU 16/7/2014
213 Huai Puang lower Se Kong Dak Cheung Se Kong 5 Wisawakam Energy MOU 13/8/2014
214 Huai Kalabai 2 Se Kong Dak Cheung Se Kong 9 KSC MOU 30/11/2015
215 Huai Kalabai 3 Se Kong Dak Cheung Se Kong 8 KSC MOU 30/11/2015
216 Huai Pa Ae Se Kong Kaleum Se Kong 15 Chaloen Construction MOU 10/2/2015
217 Nam Nyoeng Se Kong Dak Cheung Se Kong 5 Khamkhun MOU 27/6/2012
218 Huai Imoen 1 Se Kong Kaleum Se Kong 15 Thanchai Construction MOU 13/11/2015
219 Huai Imoen 2 Se Kong Kaleum Se Kong 10 Thanchai Construction MOU 13/11/2015
220 Huai Tro Se Kong Kaleum Se Kong 5 Hongkham Construction MOU 8/10/2015
221 Huai Lasam Se Kong Kaleum Se Kong 5 Lao Economic MOU 15/10/2015
222 Huai Pa Yu upper Se Kong Dak Cheung Se Kong 15 Vientiane Automation MOU 19/6/2015
223 Se Loen 1 Se Kong Kaleum Se Kong 5 Phongsapthawi MOU 16/10/2015
224 Se Loen 2 Se Kong Kaleum Se Kong 5 Phongsapthawi MOU 16/10/2015
225 Nam Nyoeng 2 Se Kaman Dak Cheung Se Kong 6 Phongsapthawi MOU 16/10/2015
226 Nam Nyoeng 4 Se Kaman Dak Cheung Se Kong 8 Phongsapthawi MOU 16/10/2015
227 Nam Nyoeng 6 Se Kaman Dak Cheung Se Kong 4 Phongsapthawi MOU 16/10/2015
228 Nam Nyoeng 8 Se Kaman Dak Cheung Se Kong 5 Phongsapthawi MOU 16/10/2015
229 Huai Wi 1 Se Kong Lamam Se Kong 5 Phongsapthawi MOU 16/10/2015
230 Huai Wi 2 Se Kong Lamam Se Kong 5 Phongsapthawi MOU 16/10/2015
231 Huai Cha Okhe 1 Se Kaman Dak Cheung Se Kong 6 Phongsapthawi MOU 16/10/2015
232 Huai Cha Okhe 2 Se Kaman Dak Cheung Se Kong 8 Phongsapthawi MOU 16/10/2015
233 Huai Konglai Se Kaman Dak Cheung Se Kong 3 Phongsapthawi MOU 16/10/2015
Total 1,823 3,777
Source: Made by the study team based on Updated Hydro Power List - June 2016 (MEM)
3-14
(2) Screening and evaluation criteria for prioritization
1) Screening policy
As shown in 3.1, the project lists were organized by MEM on June 30th, 2016.
At an early stage of this survey, the screening policy is determined based on the lists made by MEM.
Figure 3.4 shows the screening flow for the candidate projects.
Figure 3.4 Screening flow for candidate projects
Listing the projects under development (Divided into less/more than 15MW)
The study team listed the hydropower projects under development, dividing them into less/than 15MW, because projects of
more than 15 MW are licensed by the government, and projects of less than 15 MW are approved by prefectures. There is
also a purpose for investigating the actual situation with regard to divisional development at the boundary of 15 MW.
First, the study team conducted the first screening based on the scale of the project (number of projects, capacity), then
narrowed down promising areas by evaluating the river flow rate. Regarding maturity of individual projects, we surveyed
this through interviews with MEM and prefecture offices in promising areas.
Subsequently, the study team listed sponsors who own multiple development rights within a selected promising area and
have at least 1 project more than 15 MW (as it is desirable to have mid-large capacity sufficient to obtain loans). Regarding
evaluation of the social environment, for example, protected forests are distributed in all prefectures, and since it is difficult
to judge the superiority of each region, this is evaluated individually.
An outline of the development procedure for hydropower in Laos is shown in Figure 3.5.
3-15
Figure 3.5 Outline of development procedure for hydropower
Government
& MOU PDA CA
sponsor
Study of
Proposal
Commercialization
Planning Construction Commission
Sponsor
SHOA
Proposal of F/S SPC Implementation of
project through EIA CA construction
MEM SIA PPA Work
LA
CA
3-16
Policy 3 Policy 1 Policy 1
over 15MW less than 15MW
Total
Province 10 10 (MOU+ Total
Under MOU+ Under MOU+
Existing MOU PDA Total Existing MOU PDA 15MW 15MW Total PDA)
Const. PDA Const. PDA
MOU PDA
Attapeu 3 3 7 3 10 16 1 0 1 10 17
Bokeo 1 1 1 2 1 1 1 1 1 1 3 2 5
Bolikhamxay 4 1 5 1 6 11 1 7 1 8 5 9 14 20
Champasak 4 1 2 3 7 1 4 7 4 11 1 1 16 14 23
Houaphanh 1 9 3 12 13 4 3 6 6 1 13 18 26
Khammouan 1 2 2 2 5 2 2 2 4 7
Policy 2
Luangnamtha 1 1 1 2 2 1 1 1 3 2 5
Luangprabang 1 4 8 8 13 2 4 4 6 12 19
Oudomxay 1 1 1 2 3 2 1 2 2 4 7 6 10
Phongsaly 2 2 5 2 7 11 3 3 3 6 7 1 9 13 20
Salavan 2 1 3 3 6 9 4 13 2 13 16 19
Savannakhet 3 1 4 4 2 2 2 2 4 6 8
Vientiane 3 3 1 1 2 8 0 0 2 8
Vientiane Cap. 1 1 1 0 0 1 1
Vientiane Pro. 2 1 1 1 2 5 2 1 3 1 4 1 7 6 12
Vientiane-XYBL 1 1 1 0 0 1 1
Xayabouly 3 3 1 4 7 10 10 10 14 17
Xaysomboun 1 2 1 3 4 1 1 1 1 4 5
Xekong(Sekong) 2 7 2 9 11 7 7 1 7 16 18
Xiengkhuang 1 3 2 5 7 11 1 3 3 4 4 10 15
3-17
Table 3.11 The list sorted by the number of projects (made with latest list from June 2016)
over 15MW less than 15MW
Total
Province 10 10 (MOU+ Total Number of projects being just/nearly 15MW
Under MOU+ Under MOU+
Existing MOU PDA Total Existing MOU PDA 15MW 15MW Total PDA)
Const. PDA Const. PDA
MOU PDA
Attapeu 3 3 7 3 10 16 1 0 1 10 17
Bokeo 1 1 1 2 1 1 1 1 1 1 3 2 5 15MW: 1 project
Bolikhamxay 4 1 5 1 6 11 1 7 1 8 5 9 14 20 15MW: 2 projects
Champasak 4 1 2 3 7 1 4 7 4 11 1 1 16 14 23
Houaphanh 1 9 3 12 13 4 3 6 6 1 13 18 26
Khammouan 1 2 2 2 5 2 2 2 4 7
Luangnamtha 1 1 1 2 2 1 1 1 3 2 5
Luangprabang 1 4 8 8 13 2 4 4 6 12 19
Oudomxay 1 1 1 2 3 2 1 2 2 4 7 6 10
Phongsaly 2 2 5 2 7 11 3 3 3 6 7 1 9 13 20 15MW: 6 projects
Salavan 2 1 3 3 6 9 4 13 2 13 16 19
Savannakhet 3 1 4 4 2 2 2 2 4 6 8
Vientiane 3 3 1 1 2 8 0 0 2 8
Vientiane Cap. 1 1 1 0 0 1 1
Vientiane Pro. 2 1 1 1 2 5 2 1 3 1 4 1 7 6 12 15MW: 1 project
Vientiane-XYBL 1 1 1 0 0 1 1
Xayabouly 3 3 1 4 7 10 10 10 14 17
Xaysomboun 1 2 1 3 4 1 1 1 1 4 5 15MW: 1 project
Xekong(Sekong) 2 7 2 9 11 7 7 1 7 16 18
Xiengkhuang 1 3 2 5 7 11 1 3 3 4 4 10 15 15MW: 2 projects
Total 25 28 62 26 88 141 22 10 65 18 83 23 7 115 171 256
3-18
Table 3.12 List sorted by capacity
Under development Undeveloped
Total capacity
Province (MOU, PDA) rate
[MW]
[MW] [%]
Attapeu 1144 1718 66.5
Bokeo 230 401 57.3
Bolikhamxay 1492 1794 83.2
Champasak 2924 3625 80.7
Houaphanh 910 971 93.7
Khammouan 116 1441 8.0
Luangnamtha 236 243 97.2
Luang Prabang 2135 2446 87.3
Oudomxay 1051 1103 95.3
Phongsaly 527 947 55.6
Salavan 241 400 60.3
Savannakhet 317 320 99.0
Vientiane 1127 1586 71.1
Xayabouly 977 2275 43.0
Xaysomboun 253 1721 14.7
Xekong (Sekong) 1285 1623 79.2
Xiengkhouang 869 1182 73.5
Total 15833 23795 66.5
Source: Study team
3-19
Figure 3.7 Measurement points for river water levels
3-20
Table 3.13 River flow data
Catchment area Average discharge[m3/] Measurement Remarks
Measurement point Province River
[km2] May to Oct. Nov. to Apr. Yearly average period (Missing period)
3-21
6) Listing sponsors
Table 3.14 shows sponsors with multiple projects in promising areas (indicated in 3.2.3 and 3.2.4) and with projects of more
than 15 MW.
Table 3.14 Sponsors with multiple projects in promising areas
No. Sponsor Number of projects Number of projects of
owned more than 15 MW owned
1 Asia Longtheun Development 2 1
2 Asia Pacific 2 1
3 AIDC* 2 2
4 Bosaikham Phathana 6 2
5 Chaloensap Khopwongchon 9 2
6 China Sichuan Gurong Group 5 5
7 Daoheuangsong 2 2
8 DMD 5 3
9 DSK Group 2 1
10 Duangchaloen 6 6
11 ECI* 2 2
12 EDL 11 8
13 EDL-Gen* 6 5
14 Guangdong Electric Company 5 5
15 Heuangpasoet 2 2
16 Hoang Anh Gia Lai 2 2
17 Lao Samphan Phathana 3 2
18 Lao Woen Group 2 2
19 MP 2 1
20 Nalinnitha Chaloensai 3 2
21 Namtha Road Bridge 2 1
22 Nesoenaeu Consulting Group 3 2
23 Nonghai Group 4 2
24 Phongsapthawi* 34 8
25 Phonsak Group* 3 3
26 PT company 5 4
26 Saichaloen 5 1
27 Sahamit Phattana 2 1
28 Sinohydro Corporation Ltd 4 4
29 SV Group 8 3
30 Thanchai Construction 3 1
31 TK Group (T&C power HD) 4 4
3-22
32 V & H Corporation 3 3
33 Vang Sup Development and Investment 2 2
34 ECI 2 2
35 Venture Capital and Equipment Inc., (Vietnam) 2 2
36 Vientian Automation (VASE) 6 4
37 Wisawakam Construction 3 1
*Including co-development with other sponsor
Source: Study team
3-23
Capter4 Justification, Objectives and Technical
Feasibility of the Projects
(1) Background to Technical Feasibility of the Projects
1) Projects by Nonghai Group
The Nonghai Group was originally a construction company that undertook civil engineering work such as military-related roads,
bridges, runways, etc. Later, in order to diversify the business, they started hydropower IPP projects. They have been developing
five self-funded projects while obtaining financial support from the government, and some projects are under construction.
However, self-funded development has limitations, and they are looking for a strategic partner to work with jointly.
4-1
In choosing a promising site, discharge and heading are important considerations. Generally, in order to ascertain the discharge,
one must first check for existing material. When it is difficult to obtain flow data for the promising site, it is necessary to
investigate the correlation with the discharge data of a neighboring place and to prepare discharge data for the promising site.
Based on these materials, we ascertain the flow data that can be used for power generation at the relevant point, and gross head
(the difference in elevation between the intake level and the discharge point; an approximate value is calculated using a
topographic map etc.). We perform a desk study on the scale and select some power station installation candidate points. We also
need to carry out a field survey to complement the desk review and improve the accuracy of the plan. When carrying out the
field survey, it is necessary to pay attention to the following items and to feed the results of the survey back into the plan.
Status of existing roads and land owner classification
Status of existing electric power system (presence/absence of existing system, voltage /capacity, distance from power
plant, etc.)
Utilization situation of river water (already-acquired water rights, presence of recreational facilities etc. using rivers)
Laws and regulations (rivers, natural parks, natural environment preservation, national forest, forest, etc.)
Other development plans (existence of residential land development, road plans, tourism development etc.)
In addition, in the case of the water supply and sewage system, the generation method using water in factories is often a power
generation plan within existing facilities, and not all of these field survey items are necessarily required. The investigation based
on the above is carried out in the F/S and the target point discharge is set. In this project, it is necessary to confirm the
implementation status of the F/S for promising projects and to verify their accuracy.
4-2
Table 4.1 Outline of Projects
Item Nam Ngiep 2A/2B/2C Nam Ban
Province Xiengkhouang Phongsaly
Origin
Nam Hai, Nam Song Sieng Nam Ban
(confluence river)
Install Capacity 14.5 MW/18.00 MW/10.18 MW 14.0 MW
4-3
(4) Necessary Study Items
1) Extraction of Items for Consideration regarding Technical Aspects of Promising Project
For each promising project, we examine the accuracy and feasibility of the content of the power generation plan from a technical
aspect. During this, the following items are particularly verified. The verification will be conducted as per the content shown in
the F/S of each candidate project.
4-4
2) Outline and Verification of Flow Setting in Candidate Project
In planning the hydro power plan, the discharge data is necessary for calculation of power generation scale, design flow, and
annual energy production, and it is an important factor for formulating various elements of the power generation plan.
4-5
(b) Outline of set discharge by candidate project
Figure 4.1 The Positions and Coordinates of the Dams of Nam Ngiep 2A, 2B, and 2C
4-6
A meteorological station shows information about the catchment area from each observation point. The
catchment area from the dam/weir point from F/S-recorded areas are based on Google Earth and a 1/100,000
topographical map. Therefore, it cannot be said that the calculation precision for the catchment area is very
high; verification with an improvement in catchment area accuracy is required. However, there is a lack of
effective drawing data for area calculation of the area concerned, so area calculation in a 1/10,000 topographic
map is the most accurate method at the present time.
4-7
Table 4.5 Observed Mean Annual Precipitation at Meteorological Stations
4-8
Figure 4.4 Hydrographs of Specific Daily Mean Discharge at the Nam Hai/Composite 2Cb-SSN and
Nam Ngiep/Muong Mai Stations
4-9
Source: Quoted from F/S
4-10
() Nam Ban
4-12
Completion of Missing Data; Setting Long Term Mean Flow
In the F/S, the long-term discharge at the planning site is calculated from the meteorological station of M.Ngoy
and the catchment area at the dam site.
However, the F/S does not indicate why they chose the meteorological station of M.Ngoy, or that the correlation
between the dam site and the meteorological station of M.Ngoy is high.
Table 4.7 Generated Monthly Runoff of Nam Ban Basin at Dam Site
4-13
to consider the discharge at the planning point using the discharge data from a highly correlated water measurement
station, which is close to the planning site. The discharge at the planning point is obtained by calculating the
correlation coefficient between these points. When planning hydro power generation in Japan, the method of
calculating the discharge is provided by the "Small Hydroelectric Power Guide, New Energy Foundation" (p 54)
and "Hydropower Planning Point Flow Calculation Manual, New Energy Foundation" (p 33).
According to these documents, conditions for discharge considerations are as follows.
The geological conditions of the planning site and the neighboring water measuring station are similar
The characteristics of rainfall are similar
Ratio of catchment area is in the range of 0.5 to 2.0
Flowing rivers are in parallel
Observation data for the planning point discharge is for one year or more
According to the above conditions, the F/S for the candidate project are as follows. At the candidate project sites,
since there are few meteorological stations the dam site and the river at the meteorological station are not parallel.
In addition, the catchment area ratio does not satisfy the conditions. However, for the Nam Ngiep site the discharge
has been observed for about two years at the planning site with information collected to verify the correlation. The
point observation discharge data for the Nam Ban point has only been accumulated for about 5 months. Therefore,
it is necessary to verify the accuracy for the accumulation of observation data and discharge setting.
4-14
() Considerations in Calculation of River Basin Area at Dam Site
Nam Ngiep2C
Nam Ngiep2B
Nam Ngiep2A
Total area
4-15
Figure 4.8 Catchment Area of Nam Ngiep Site Measurement Chart with 1/150,000 Topographic Map
Nam Ngiep2C
sanluang diversion Nam Ngiep2C
Dam site1(D3)
Nam Ngiep2B
Dam site
4-16
Nam Ban
According to the F/S, it can be assumed that the catchment area of the dam site is calculated based on a 1/50,000
topographic map. We calculated the catchment area at the dam site based on a topographic map (1:150,000),
then collected and compared it with the catchment area shown in the F/S. In addition, we used AutoCad to
calculate the catchment area with the collected topographic map (1:150,000). As a result of calculating the
catchment area, we did not see much difference from the catchment area shown in the F/S.
Figure 4.9 Catchment Area of Nam Ban Site Measurement Chart with 1/150,000 Topographic Map
4-17
() Considerations in Setting of Long-term Discharge
If the discharge data at the watering station at the planning point does not cover 10 years, it is necessary to
complement the flow rate data for the years that are insufficient. According to "Hydroelectric planning point flow
rate calculation manual, New Energy Foundation", the complementary method is as follows.
Select a water measurement station to use for the complement
Analyze the correlation for the same years discharge data from the water measurement station at the
planning site and the water measurement station used for supplementation
Estimate the regression equation for the discharge data
Complement the discharge for the insufficient years from the discharge data of the measuring station
by using the estimated regression equation
The selection method and considerations concerning the measuring station used for supplementation are shown in
the previous section. Below, we consider the supplementary concept of discharge and the calculation method for
long-term discharge.
Nam Ban
In the F/S for Nam Ban, we do not clarify the high correlation between the dam site discharge and the
meteorological station M.Ngoy. It is considered that the discharge at the planning point is calculated based on
the ratio of the catchment area at the two points. As mentioned earlier, observation data at the planning point is
only for about 5 months. Moreover, since the M.Ngoy point to be supplemented is far from the planning site
and the area of the catchment basically differs between them, the discharge at the planning point may be
different from the discharge in the F/S. Therefore, it is better to accumulate observation data and improve the
accuracy of the discharge setting.
4-18
Figure 4.10 Composite 2Cb-SSN and Muong Mai Hydrometric Stations
Correlation of Monthly Mean Discharge (Repeated)
50
40
30
20
10
0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
4-19
Table 4.11 Long Term Discharge table in Each Area of Nam Ngiep
NamNgiep 2C NamNgiep 2C NamNgiep 2C NamSongSieng NamNgiep 2B NamNgiep 2A
Meuang Mai
Sanluang DamD3 DamD3A Diversiondam Dam Dam
4-20
NamNgiep 2C NamNgiep 2C NamNgiep 2C NamSongSieng NamNgiep 2B NamNgiep 2A
Meuang Mai
Sanluang DamD3 DamD3A Diversiondam Dam Dam
4-21
NamNgiep 2C NamNgiep 2C NamNgiep 2C NamSongSieng NamNgiep 2B NamNgiep 2A
Meuang Mai
Sanluang DamD3 DamD3A Diversiondam Dam Dam
4-22
NamNgiep 2C NamNgiep 2C NamNgiep 2C NamSongSieng NamNgiep 2B NamNgiep 2A
Meuang Mai
Sanluang DamD3 DamD3A Diversiondam Dam Dam
4-23
3) Outline and Confirmation of Head Loss and Rate Head in the Candidate Project
Head loss accompanying the friction, bending and the like of penstock and headrace has a large influence on the calculation of
install capacity where the total head is relatively small.
4-24
Figure 4.12 Outline of Head Loss
Head Loss
Penstock
Gross Head
Water Turbine
Rate Head
Head tank
Intake Dam
Suction Pipe
4-25
Basic Information such as Gross Head, Rate Head, Install Capacity
The information on the gross head, rate head, install capacity, and design flow in Nam Ngiep 2A, 2B, and 2C
is as follows. For points where the efficiency of the generator or turbine is not specified, it is calculated based
on the rate head and install capacity. When there is a difference between the content indicated by the F/S, such
as penstock length and diameter, and the completed drawing separately obtained in this survey, the latest
acquired figure data was used.
-- --
Headrace length m 3,000 [ ] read from drawing
[2,889.07] [276.46]
679.12 1,397.71
Penstock length m 260.45 [ ] read from drawing
[474.5] [1,572.26]
2.62
Penstock diameter m 2.7 1.25 [ ] read from drawing
[2.20]
0.012 (Iron)
Roughness 0.012 0.012
0.014 (concrete)
Headrace loss m 3.000 5.600
4-26
() Nam Ban
Subject to be Calculated for Head Loss
Calculation formulas and calculation process concerning the head loss in the F/S are not clearly stated. Rate
head is indicated in the table Salient Features of Nam Ban.
4-27
(c) Confirmation of Head Loss Based on Acquired Data
Based on the F/S data, we calculated the head loss and confirmed the difference from that shown in the F/S. Information
such as penstock length was obtained from the F/S, and for the calculation formula for the head and coefficients, Japanese
hydrological official collection etc. was used. We calculated the head loss for the items listed below.
H = H1 + H2 + H3 + H4 + H5
4-28
Branch Loss of Penstock
h3 f (V2 / 2g)
f Coefficient Given by Pipe Area Ratio, Intersection Angle Between Main Pipe
and Branch Pipe
V Average Flow Velocity (design flow)
g Gravitational Acceleration 9.8m2/s
Valve loss
h4 fv (V2 / 2g)
fv Coefficient according to valve type (Butterfly valve fv=0.20)
V Average Flow Velocity (design flow)
g Gravitational Acceleration 9.8m2/s
Table 4.16 Comparison of Head Loss and Install Capacity at Nam Ngiep 2A
Item F/S Calculation for confirmation
4-29
Table 4.17 Comparison of Head Loss and Install Capacity at Nam Ngiep 2B
Item F/S Calculation for confirmation
Table 4.18 Comparison of Head Loss and Install Capacity at Nam Ngiep 2C
Item F/S Calculation for confirmation
4-30
Table 4.19 Comparison of Head Loss and Install Capacity at Nam Ban
Item F/S Calculation for confirmation
4-31
4) Outline and Confirmation of Project Cost in Candidate Project
(a) Main Flow of Cost Calculation in Candidate Project F/S
In the F/S, the main flow in the cost calculation is as follows.
4-32
(b) Outline of Construction Cost by Candidate Project
Each candidate project calculates the construction cost. Calculation items for the construction cost at Nam Ngiep 2C are
as follows.
Diversion works Calculate by multiplying the designed quantity by the unit times 2,871 m3 11.9.1.3
Calculate in the residential area specified in the method statement, but the costs of the
House building works for
office and residential welfare facilities are analyzed according to the actual situation of
construction and management
HPP and calculated
Architectural work
Diversion Dam Sanluang
Diversion Canal Sanluang Calculate quantity from design drawing
Dam(D3,D3A,D3B)
Open excavation (soil, rock)
Intake
Tunnel excavation (soil, rock) 11.9.1.4
Tunnel 13
Concrete (open,
Canal between tunnels
Slope protection
Intake penstock Embankment Soil / rock
Spillway etc.
Penstock
Powerhouse
Electrical & mechanical equipment Set unit price of generator, turbine etc.
Metal structure and equipment installation
Compensation for land acquisition and resettlement
UXO clearance
Independent Cost
Project management fees Management supervision, consulting, examination, insurance cost etc.
Production preparation fee Calculated with 0.5% of equipment cost 11.9.1.1
Cost for scientific research,
1% of construction and installation work amount.
investigation and design
Cost for scientific research, investigation
396,933
and design
USD
Basic contingency cost 5%
Contingency cost for price difference
Credit fee
Loan interest during construction period
Source: study team
4-33
(c) Confirmation of Construction Cost
4-34
() Comparison of Setting Conditions for Material Costs and Labor Costs
In the F/S for Nam Ngiep 2C, the material costs are indicated. The results of comparing these with the costs in Japan
are as follows. In the comparison table (Table 4.20), raw material costs such as steel materials and cement are about
90% of the cost in Japan, which means that there is not much difference. However, the material cost in the F/S for
Nam Ngiep 2C includes cargo costs, and expenses for storage.
Table 4.23 Comparison of Various Material Costs Between Laos and Japan
Laos Japan
F/S Construction price (2015.06) diameter
Remarks
unit price (A) unit price (B) A/B
(USD/t) (JPY/t) (USD/t)
Steel Bar 954.11 115,000 1,076.28 0.89
Cement 115.00 9,00013,800 82.23129.15 0.881.40
Sand 16.00 1,7002,000 15.9118.72 0.851.01
1 USD = 106.85 JPY About unit price of sand, per m3
Source: study team
In the F/S for Nam Ngiep 2C, the labor force ratio based on Laos' domestic price level is shown. According to the
table below (Table 4.21), Laos labor costs are roughly 10% of those in Japan.
Table 4.24 Comparison of Various Labor Costs Between Laos and Japan
Laos Japan
F/S Public construction design diameter
Remarks
unit price (A) labor unit price (B) A/B
(USD/hr) (JPY/8hr) (USD/hr)
15,400 18.01 0.08
Senior skilled worker 2.17
21,900 25.62 0.12
13,300 15.56 0.07
Skilled worker 1.60
18,900 22.11 0.10
10,500 12.28 0.08
Semi-skilled worker 1.25
13,200 15.44 0.10
9,300 10.88 0.07
Unskilled worker 1.03
12,600 14.74 0.09
1 USD = 106.85 JPY
Public construction design labor unit price (Ministry of Land, Infrastructure, Transport and Tourism)
is data from 2014
Source: study team
4-35
() Calculation of Construction Cost According to Japan's Accumulation Standard at Nam Ngiep 2C
When formulating a small to medium hydropower generation plan in Japan, in order to study the optimum scale,
"Hydropower Plan Planning Construction Cost Evaluation Guide" (March 2013, Ministry of Economy, Trade and
Industry, Agency for Natural Resources and Energy, General Foundation, New Energy Foundation) is used. This
guidance is mainly used to calculate construction costs for optimum scale considerations when considering a power
generation plan using a 1/25,000 topographic map. The construction costs in this guidance are calculated using the
relational expression obtained from design flow and install capacity. In this survey, the construction cost for each
candidate project site is calculated based on this guidance and it is compared with the construction cost indicated by
the F/S. However, as shown in the previous section, the material costs are little different between the two countries,
but the labor costs are greatly different. Moreover, the cost difference varies depending on each item, due to the
difference in classification of laborers, choice of construction method, expense ratio, etc. In this survey, the details
of the construction costs in the F/S are unknown, so it is difficult to confirm the construction costs with high precision.
Therefore, we compare the construction costs shown in the F/S with those based on Japanese guidance, and consider
items with particular differences and their factors.
4-36
Photo 4.3 D3 Dam and Access Road, Nam Ngiep 2C
f. Mechanical / Metal
172.01 189.2 325.7 1.72 f 10
Equipment
3 Electrical Equipment 354.33 389.8 1,079.8 2.77 P=10,180kW, H= 65.0m
Temporary / Auxiliary
4 259.65 285.6 450.1 1.58 2345%Temporary Road (3.0km)
Work
5 Sub Total 1,506.08 1,656.7 5,227.4 3.16 15
4-38
Nam Ngiep 2 B
Construction Cost by F/S Calculation
Ratio
(A) Estimate
Remarks
4 6 6
(10 USD) (10 JPY) (10 JPY) (B) / (A)
f. Mechanical / Metal
243.2 267.5 320.9 1.20
Equipment
3 Electrical Equipment 553.1 608.4 1,210.3 1.99 P = 18,000kW, H = 133.05m
Temporary / Auxiliary
4 482.2 530.4 779.3 1.47 235Temporary Road (7.9km)
Work
5 Sub Total 2,120.0 2,332.0 5,674.1 2.43 1 4
4-39
Nam Ngiep 2C
Calculation
Construction Cost by F/S
Estimate Ratio
(A)
(B) Remarks
(B) / (A)
(104 USD) (106 JPY) (106 JPY)
Tunnel 259.6 285.6 511.1 1.79 Tunnel #1, Tunnel #2, Tunnel #3
d. Penstock /
124.2 136.7 708.9 5.19 =1.25m, L=1,397.71m
Pressure Line
Mechanical / Material
245.2 269.7 736.6 2.73
Equipment
e. Construction Work 71.2 78.3 238.6 3.05
f. Mechanical / Metal
174.0 191.4 498.0 2.60
Equipment
3 Electrical Equipment 401.4 441.5 826.2 1.87 P = 14,500kW, H = 356.0m
Temporary / Auxiliary
4 413.3 454.6 1,320.0 2.90 2345Temporary Road (14.0km)
Work
5 Sub Total 2,186.8 2,405.5 7,789.0 3.24 15
4-40
Nam Ban
Construction Cost by F/S Calculation
Ratio
(A) Estimate
Remarks
4 6 6
(10 USD) (10 JPY) (10 JPY) (B) / (A)
Water Channel
1,871.6 2,058.7 10,601.1 5.15
(Tunnel)
a. Dam 1,540.1 1,694.1 9,778.6 5.77
Diversion Tunnel
b. Diversion Canal 69.0 75.9 74.8 0.98
R=5.0m, L=130.0m
Spillway
c. Spillway Tailrace 94.6 104.0 333.6 3.21
B=5.0m, H=5.0m, L=200m
d. Penstock /
167.9 184.7 414.1 2.24 =2.80m, L=150m
Pressure Line
Mechanical / Material
125.0 137.5 970.8 7.06
Equipment
e. Construction Work 0.0 0.0 419.8 0.00
f. Mechanical / Metal
125.0 137.5 551.0 4.01
Equipment
3 Electrical Equipment 450.0 495.0 1,368.0 2.76 P = 14,000kW, H = 51.1m
Temporary / Auxiliary
4 342.0 376.2 1,379.8 3.67 235Temporary Road (10.0km)
Work
5 Sub Total 2,898.7 3,188.6 14,454.8 4.53 15
4-41
Considerations in Comparing each Candidate Projects Construction Cost
In terms of construction costs in the F/S when converting at 1 USD = 110 JPY and construction costs based on
Japan's guidance, an opening of 2.48 to 4.55 times is seen. Looking at the construction items, the cost of the
power house building is about four times as expensive as for Nam Ngiep 2A, 2B and 2C, while the Nam Ban
point is only about 1.1 times. It is expected that the expenses estimated in the F/S for Nam Ban will be set
higher than in other districts. Regarding Dam costs, among water channel costs, there is a difference of 2.4 to
5.8 times for each candidate project. Especially at Nam Ban, the cost ratio of the Dam is about 50% of the total,
and it is considered that the cost accuracy of the Dam greatly contributes to the economics of the project.
Regarding the Penstock/Pressure Line cost, there is a difference of 2.2 to 5.2 times for each candidate project.
In general, the cost gap at the Nam Ngiep site is large, but this is considered to be longer than the Nam Ban
spot because the extension of the Penstock is long, leading to an increase in disparity. Regarding the Electrical
Equipment cost, there is a difference of 1.99 to 2.77 times for each candidate project. Since the difference for
each candidate project is not large compared with other cost items, the expense setting for the water
turbine/generator introduction cost is generally stable. The construction cost per 1 kW is used as an index to
evaluate the economic efficiency of a hydropower generation plan. Generally, for reservoirs and adjustment
pond type hydropower generation, the construction cost per 1 kW is required to be low. Looking at the
construction cost per 1 kW for each candidate project, it is 326.6 ~ 548.9 thousand yen/kW at the Nam Ngiep
site, while 1,071 thousand yen/kW at the Nam Ban site. For this reason, it can be said that the Nam Ngiep site
is more economical than the Nam Ban site.
4-42
Table 4.26 Comparison of F/S Construction Cost and Construction Cost Based on Japanese Guidance
Site Nam Ngiep 2A Nam Ngiep 2B Nam Ngiep 2C Nam Ban
3
Design Flow(m /s) 18.00 16.00 4.86 31.80
Water Channel 644.1 2,913.5 4.52 775.8 2,808.9 3.62 1,197.7 4,741.4 3.96 2,058.7 10,601.1 5.15
a. Dam 174.2 572.5 3.29 256.8 622.2 2.42 584.6 2,874.8 4.92 1,694.1 9,778.6 5.77
b. Diversion
351.4 1,909.3 5.43 439.8 1,778.5 4.04 412.0 854.1 2.07 75.9 74.8 0.98
Canal
c. Spillway /
9.4 53.9 5.74 4.0 16.8 4.18 64.4 303.6 4.71 104.0 333.6 3.21
Tailrace
d. Penstock /
109.1 377.8 3.46 75.2 391.3 5.20 136.7 708.9 5.19 184.7 414.1 2.24
Pressure Line
Mecanical /
302.1 669.7 2.22 379.6 721.3 1.90 269.7 736.6 2.73 137.5 970.8 7.06
Material Equipment
3 Electrical Equipment 389.8 1,079.8 2.77 608.4 1,210.3 1.99 441.5 826.2 1.87 495.0 1,368.0 2.76
Tenmorary /
4 285.6 450.1 1.58 530.4 779.3 1.47 454.6 1,320.0 2.90 376.2 1,379.8 3.67
Auxiliary Work
5 Sub Total 1,656.7 5,227.4 3.16 2,332.0 5,674.1 2.43 2,405.5 7,789.0 3.24 3,188.6 14,454.8 4.53
6 Power Supply 41.7 88.0 2.11 41.7 204.6 4.91 29.7 169.8 5.71 110.0 550.0 5.00
7 Total 1,698.0 5,315.0 3.13 2,373.6 5,879.0 2.48 2,435.3 7,959.0 3.27 3,298.6 15,005.0 4.55
4-43
() Considerations in Construction Cost
In the F/S, construction costs are calculated, such as labor costs and material costs. In addition, quantities based on
the plan are shown for temporary roads and transmission lines necessary for construction. When considering the
quantity by cost item at the point of Nam Ngiep 2C, it is thought that the precision of the construction cost is high
because it seems to have been recorded based on detailed drawings, such as for the amount of concrete and the
amount of excavation. However, there are the following items that are not unified, such as the necessity of
accounting, or not being recorded, and there is a possibility that the investment amount may further increase
considering these items.
Removal cost for UXO
Cost for relocation of settlements/residents in flooded areas
Candidate Projects
In Japan, there have been little new hydropower electricity projects over the past two decades. In particular, no new hydropower
dam is newly constructed by electric power companies after 2015. Henceforth, there is little opportunity to experience and inherit
development know-how, from site selection to commercial operation, such as feasibility study, design, procurement, construction
management and test run. In turn, increasing in portion are engineers who have only experienced the operation and management
of hydropower dams even at electric power companies.
Construction and operation of hydropower dams, however, are essentially fungible and sequential processes. Therefore,
experiencing and inheriting developmental know-how of hydropower dams shall result in further enhancement in its operation
and maintenance skills too.
In Japan, the general and pumped storage hydropower accounts for approximately 20% of electric power source. The general
hydropower is stable and less expensive source for base load, and the pumped storage hydropower is demand-flexible source for
peak load. Moreover, the hydropower in general is CO2-emission free, and makes usage of domestic resources independently
from the fuel import.
For electric power companies in Japan, henceforth, participation into green field hydropower projects in overseas shall result in
further enhancement of operation and maintenance of domestic hydropower facilities and new development of hydropower
projects in the future, thereby contributing to the stable energy supply in Japan.
4-44
4-45
Capter5 Evaluation of Environmental and Social
Impacts
(1) Analysis of present state of environmental and social aspects
Laos is a landlocked country located in the Indochinese peninsula of Southeast Asia, bordering China in the north, Vietnam in
the east, Cambodia and Thailand in the south, and Myanmar in the west. The total state size is 238,000 km2, which is about
60% of the size of Japan, with a population of approximately 6,492,000 people1, equivalent to about 5% of Japans population.
The political system is a socialist state, with the country governed by the Lao People's Revolutionary Party.
1) Natural environment
Laos has the highest forest occupation rate in Southeast Asia, over 80% of the country being natural forest, forest plantation
and unstocked forest.
Table 5-1 The statistics for land use and forest cover in Lao PDR in 2013
In the period between 1992 and 2002, forest decline caused by illegal logging and deforestation became a big social problem
in Laos. It is said that the forests disappeared at a pace of 1.25% (140,000 ha in area) a year from 1992 to 2002.
1
Results of Population and Housing Census 2015, by Statistics Bureau of Laos
5-1
Figure 5.1 Forest Cover Rate and Area in Laos
80 18
70 16
14 ( million ha )
60
12
50
10 Forest Cover Rate
40
8 Area Million ha)
30
6
20 4
10 2
0 0
1960 1992 2002 2010
In our field survey, we found that many areas of forest have disappeared. When traveling on a domestic flight, we noticed
circular deforestation, and found that such scenes were widespread. The local people said that mainly ethnic minorities such
as the Mon tribe have cut down forests for the purpose of cultivating maize and other crops.
With regard to such logging for agriculture, which occurs repeatedly in various places, it seems to be difficult for the Lao
government to ascertain accurate figures. Forests are called "green dams", having the function of storing water, but there is
growing concern that the green dam function will be lost due to the frequent occurrence of such partial deforestation.
Photo 5-1 Deforestation viewed from the sky Photo 5-2 Mudslide due to deforestation
On the way to a dam site for our field survey, we also found an extensive watermelon field cultivated by a Chinese company,
5-2
with the watermelons being for export to China. The farm, operated by the Chinese company, hires many local people as
farmers. Therefore, it seems it will be difficult to stop the disappearance of forests as long as such agricultural activities provide
socioeconomic benefits to the farmers and local economies.
Photo 5-3 Watermelon field operated by a Chinese company for export
7000 6492
5622
6000
5000 4575
4000 3585
Population
Size in
millions
3000
2000
1000
0
1985 1995 2005 2015
Census Year
Source: Results of Population and Housing Census 2015, Statistics Bureau of Laos used for creation by Study team
As for the population distribution by prefecture and the regional distribution of the working population, about 1,123,000 people
(31.6%) are in urban areas, about 2,157,000 (60.8%) are in regions with improved road connections, and about 268,000 (7.6%)
are in regions with not yet improved road connections.
5-3
Figure 5-3 Population by Province, 1985-2015
Source: Results of Population and Housing Census 2015, Statistics Bureau of Laos
Source: Results of Population and Housing Census 2015, Statistics Bureau of Laos
5-4
Laos' GDP in 2015 is US$ 12.33 billion, which was the lowest among ASEAN countries. Its GDP growth rate is 7%.
Figure 5.5 GDP of ASEAN Countries, 2015
Thailand, Indonesia,
395,281.58 861,933.97
Singapore, Laos,
292,739.31 12,327.49
Malaysia,
Philippines, 296,217.64
291,965.34 Myanmar,
64,865.52
In 2012, the countrys GDP is almost evenly (1/3 each) shared by three industries: service (37%), manufacturing (31%), and
agriculture/forestry/fishery (26%). Workers engaged in the primary industries, such as agriculture, forest and fishery, account
for as much as 72.3% of the total working population, with 6.3% in government-related industry including the military, 5.3%
in retailing, and 2.3% in education-related jobs. Thus, an overwhelming share of the working population is employed in the
agriculture industry.2
3) Ethnic minorities
Laos is an ethnically diverse country. Although approximately 99% of people living in Laos have their nationality as Laotian,
they include various ethnic minority groups. Some ethnic groups live in mountainous areas and speak their own languages.
Moreover, some ethnic groups living in the central part of Laos are regarded as anti-government armed groups. Especially
since 2015, in Xiengkhouang Province and Xaysomboun Province, there have been several attacks on Chinese investors.
Now, the Laos police department patrols the center of Xiengkhouang Province on a 24-hour basis to strengthen vigilance
against such criminal offenses.3
In several hydropower development projects, there have been cases of the Lao government army following the project teams
from the investigation stage to the construction stage. A request can be made very easily just by submitting a request form.
The required cost amounts to gasoline and food charges only. After submission of the request form to the military department,
an estimation will be sent back.
2
FY 2014 Laos/Cambodia Electric Power Case Survey Report by Japan Electric Power Information Center (JEPIC)
3
Website of Ministry of Foreign Affairs: "Overseas Travel Safety Information
5-5
Figure 5.6 Population by Ethnic Group
Source: Results of Population and Housing Census 2015, Statistics Bureau of Laos
4
FY 2014 Laos/Cambodia Electric Power Case Survey Report by Japan Electric Power Information Center (JEPIC)
5-6
Table 5.3 Breakdown of electricity sources for Laos and respective CO2 emission factors
CO2 emission factor (t-
Supply source GWh %
CO2/MWh)
Laoss domestic hydropower facilities 2398 64.4 0
Thailand 1180 31.7 0.5796 5
Vietnam 37 1.0 0.6808 6
China 113 3.0 0.9515 7
Source: Creation by Study team
3) Estimation of effect
The performance of each candidate project is as follows.
Calculation formula: Annual power generation (MWh)
= Planned output (MW) 24 (h) 365 (days) Annual facility utilization rate
Calculation formula: Annual CO2 emission reduction effect (t)
= Annual power generation amount (MWh) 0.2191 t - CO2 / MWh
Table 5.4 Performance of each candidate project, planned output, Annual facility utilization rate, Annual power generation,
and Annual CO2 emission reduction effect
Candidate project Planned output Annual facility utilization Annual power generation Annual CO2 emission
name (MW) rate (%) amount (MWh) reduction effect
Nam Ngiep 2C 14.5 62.5 79,387.5 17,393.8
Nam Ngiep 2B 18 58.67 92,510.9 20,269.1
Nam Ngiep 2A 10 58.74 51,456.2 11,274.1
Nam Ban 14 52.63 64,545.4 14,141.9
Source: Creation by Study team
According to the above table, the annual CO2 reduction amount becomes 63,078.9 tons if all candidate projects are carried
out.
project implementation
Based on the Screening Style and Check List (Appendix 4) of JICAs "Guidelines for Environmental and Social
Considerations", we conducted a survey to identify environmental and social impact items related to the candidate projects
covered by this survey.
5
2010 Operating Margin from IGES Grid Emission Factor List
6
2013 Operating Margin from IGES Grid Emission Factor List
7
2011-2013 Average Operating Margin (Central China power network) from IGES Grid Emission Factor List
5-7
As a result, we concluded that no significant environmental or social impact was observed for each of the Nam Ngiep 2C, 2B
and 2A projects, which are under construction. In addition, for the Nam Ban project at the FS phase, there is no serious
environmental impact though there are two kinds of social impacts: one is the need for relocation of residents, and the other is
road construction in the vicinity. The village near the development target is located in a deep mountainous area and there are
no access roads, so the villagers have to come and go by boat along a river, which runs in the area for the planned dam site.
According to our interviews with the villagers in the field survey, they have already been consulted about the relocation, and
it has been determined that they will return to the place where they previously resided. Therefore, there is no serious negative
impact concerning the relocation at present. Regarding the construction of an access road to the village, there was originally a
plan with a military budget. However, the plan was postponed when the dam project arose, with the expectation that the access
road would be built for the dam construction. If this project does not move forward, the construction of the access road to the
village may be delayed. Even in that case, the residents would still be able to come and go by boat along the river as usual, so
this would not cause any serious impact.
Ministerial Instruction on the Process of Initial Environmental Examination (IEE) for Investment Projects and
Activities No. 8029 (by the Minister of Natural Resources and Environment)
5-9
Ministerial Instruction on Environmental and Social Impact Assessment (ESIA) Process for Investment Projects and
Activities No. 8030 (by the Minister of Natural Resources and Environment)
According to the Decree on Environmental Impact Assessment, all hydroelectric power projects are classified into two
categories depending on the scale of project, and an Initial Environmental Examination (IEE) or Environmental Impact
Assessment (EIA) is required.
Table 5-7 Water resources usage fee for hydroelectric power project
Type of project Ratio to total income
Hydropower project for export purposes
5% or more
Hydropower project for domestic use (over 15 MW)
Hydropower project for domestic use (15 MW or less) 5%
Source: Creation by Study team
5-10
6) Wildlife and Aquatic Law (2007)
Wildlife and aquatic animals are classified into three categories: Prohibition, Management, and Common/general. For
utilization of animals falling into the Prohibition category, government permission is required. For those falling into the
Management category, proper management is required. For the Common or general category, it is required that the utilization
of such animals will not cause a decrease in their number.
5-11
Capter6 Financial and Economic Evaluation
(1) Estimation of Project costs
In this section, in order to examine the financial and economic feasibility of the proposed projects, an estimation of project
costs was conducted as the basis of the examination.
Project
Nam Ngiep
Item Nam Ban
2 2B 2C
Mil. USD Ratio Mil. USD Ratio Mil. USD Ratio Mil. USD Ratio
1) Power House Building 0.3 1.7% 0.3 1.1% 0.4 1.3% 1.1 2.6%
2) Construction Work 8.6 46.0% 10.5 33.5% 13.3 47.0% 20.0 47.1%
Water Channel 5.9 31.3% 7.1 22.5% 10.9 38.4% 18.7 44.2%
Mechanical / Material Equipment 2.7 14.7% 3.5 11.0% 2.5 8.6% 1.3 3.0%
3) Electrical Equipment 3.5 19.0% 5.5 17.6% 4.0 14.2% 4.5 10.6%
4) Temporary / Auxiliary Work 2.6 13.9% 4.8 15.4% 4.1 14.6% 3.4 8.1%
5) Power Supply 0.4 2.0% 0.4 1.2% 0.3 1.0% 1.0 2.4%
Sub Total (Construction cost) 15.4 82.6% 21.6 68.7% 22.1 78.1% 30.0 70.8%
6) 115KV outgoing line project cost 0.0 0.0% 3.1 9.8% 0.0 0.0% 0.0 0.0%
7) Environmental and UXO clearance cost 0.2 1.1% 0.5 1.5% 0.6 2.0% 2.5 5.9%
8) Consulting fee, etc. 2.1 11.5% 5.2 16.6% 4.3 15.2% 6.6 15.6%
10) Basic contingency cost 0.9 4.8% 1.1 3.4% 1.4 4.8% 3.2 7.7%
Total 18.7 100.0% 31.4 100.0% 28.4 100.0% 42.3 100.0%
Construction cost is quoted from Chapter 4, Table 4.22 Comparison with F/S construction cost
Source: Study team
In all the proposed projects, construction work accounts for a significant portion, of 33% to 48%. For items other than
construction cost, the consulting fee accounts for a large proportion, of around 11% to 17%. Basic contingency cost is set at
3% to 8% of the total. For the specific costs of the project, the cost of a 115 kV transmission line is required for Nam Ngiep
2B, so related expenses are recorded. No unusual items were detected from the overall cost structure.
In the section "2) Analysis of project costs for each proposed project", we will verify consulting expenses etc., which account
for a large percentage of the total cost.
6-1
Table 6.2 Details of Project costs for Nam Ngiep 2A
USD JPY
Item Sub Item Domestic goods Foreign goods Total Domestic goods Foreign goods Total
(Mil. USD (Mil. USD (Mil. USD (Mil. JPY (Mil. JPY (Mil. JPY
Construction cost 1 Power House Building 0.3 0.3 35.2 35.2
2 Construction Work 8.2 0.4 8.6 906.9 39.3 946.2
Water Channel 5.9 5.9 644.1 644.1
Mechanical / Material Equipment 2.4 0.4 2.7 262.8 39.3 302.1
Item Sub Item Domestic goods Foreign goods Total Domestic goods Foreign goods Total
(Mil. USD (Mil. USD (Mil. USD (Mil. JPY (Mil. JPY (Mil. JPY
6-2
Table 6.4 Details of Project costs for Nam Ngiep 2C
USD JPY
Item Sub Item Domestic goods Foreign goods Total Domestic goods Foreign goods Total
(Mil. USD (Mil. USD (Mil. USD (Mil. JPY (Mil. JPY (Mil. JPY
Construction cost 1 Power House Building 0.4 0.4 42.0 42.0
2 Construction Work 12.1 1.3 13.3 1,326.9 140.5 1,467.4
Water Channel 10.9 10.9 1,197.7 1,197.7
Mechanical / Material Equipment 1.2 1.3 2.5 129.2 140.5 269.7
3 Electrical Equipment 0.4 3.6 4.0 45.1 396.4 441.5
4 Temporary / Auxiliary Work 4.1 4.1 454.6 454.6
5 Power Supply 0.3 0.3 29.7 29.7
Sub Total 17.3 4.9 22.1 1,898.4 536.9 2,435.3
Environmental and UXO Submerging treatment of reservoir,
clearance cost permanent land occupation &
1 0.3 0.3 30.0 30.0
temporary land occupation for
construction
2 Environmental work 0.0 0.0
3 UXO clearance 0.3 0.3 32.3 32.3
Sub Total 0.6 0.6 62.3 62.3
Consulting fee 1 Project acceptance fee 0.1 0.1 5.7 5.7
2 Production preparation fee 0.0 0.0 2.7 2.7
3 Preliminary engineering fee 0.7 0.7 80.9 80.9
4 Research and survey and design fee 1.0 1.0 113.9 113.9
5 Construction management fee 0.5 0.5 50.7 50.7
6 Construction supervision fee 0.8 0.8 83.8 83.8
In addition, the adequacy of the consulting fee amount, project insurance cost and various taxes (hereinafter referred to as
consulting expenses, etc.) within the construction expenses was calculated based on actual data for electric power companies
in Japan and the estimated amount of consulting fees, etc. A conservative estimate was carried out, comparing it with the F/S
amount. In calculating the estimated amount, the following conditions were set.
In the F/S, consulting expenses are classified into sub items and recorded, but with reference to the data for electric
power companies in Japan, 10% of the construction costs are collectively recorded.
The project insurance cost was set at 0.75% of the construction cost with reference to the data for electric power
companies in Japan.
Taxes are taken as 10% of imported goods, taking into account the high value-added tax rate.
6-3
Table 6.6 Verification of consulting fee, etc. for Nam Ngiep 2A
Construction cost Construction cost (a) Estimated
Estimation (b) refer from F/S (a)-(b) Difference
Item / Total / Foreign goods amount
conditions (Mil. USD (Mil. USD
(Mil. USD (Mil. USD (Mil. USD
Consulting fee 15.4 - 10.00% 1.5 1.9 (0.4)
Project insurance cost 15.4 - 0.75% 0.1 0.1 0.0
Taxes - 3.5 10.00% 0.3 0.1 0.2
Total 2.0 2.1 (0.1)
6-4
Compensation costs, environmental spending, and UXO survey and removal costs shall be included.
Basic contingency cost was set at 3% to 8% of total project cost with reference to F/S figures.
The progress rate for 3 years of construction period was assumed as 30% in the first year, 50% in the second year and
20% in the third year, and the project costs were assumed to be disbursed in proportion to such progress rate.
Yearly operation and maintenance costs (maintenance costs excluding depreciation cost, payment interest expense and
taxes) such as repair costs, etc. for hydropower generation structure and related electrical equipment was set as
equivalent to 1.5% of the static project cost, with reference to not only hydropower IPP projects in Laos but also actual
data for Japanese power companies.
It was assumed that there should be no facility renewal cost required for an economic service life of 30 years.
For Nam Ngiep, revenues from sales of electric power to EDL were set at 6.7 USC/kWh from start of operation to
14th year, 5.7 USC/kWh from 15th year to 27th year, and 6.0 USC/kWh from 28th year onward, based on PPA
concluded between EDL and sponsors. For Nam Ban, revenues were set at 6.5 USC/kWh from start of operation.
The cost for hydropower generation royalty was set at an amount equal to 2% of total revenues.
Profit tax was set at 24%, based on Laos Tax Law, and tax exemption period as investment incentive was set at 6 years
from the start of operation.
Table 6.10 summarizes the cost parameters over the project period for each proposed project based on the above estimation
conditions.
Table 6.10 Parameters that affect the cost of each project
Project
Item Unit Nam Ngiep
Nam Ban
2 2B 2C
PPA Tariff RateStart of operation-14 years USC/kWh 6.7 6.7 6.7 6.5
PPA Tariff Rate15 years-27 years USC/kWh 5.7 5.7 5.7 6.5
PPA Tariff Rate28 years- USC/kWh 6.0 6.0 6.0 6.5
Annual O&M/Static Project Cost % 1.5% 1.5% 1.5% 1.0%
Royalty/Annual Income % 2.0% 2.0% 2.0% 2.0%
Profit Tax Rate % 24.00% 24.00% 24.00% 24.00%
Tax Holiday year 6 6 6 6
Capacity MW 10.18 18.00 14.50 14.00
Average Annual Energy GWh/year 52.40 92.51 71.73 65.01
Average Annual Energy
GWh/year 52.4 91.6 71.0 65.0
(Except for in-house electricity consumption)
Depreciation Period year 30 30 30 30
Total Annual Energy during depreciation period GWh 1,572 2,775 2,152 1,950
Total cost of depreciation, loan interest and O&M cost Million USD 34.8 46.2 56.1 79.1
Cost of power generation USC/kWh 2.2 1.7 2.6 4.1
6-5
(2) Outline of preliminary Financial and Economic Analysis results
Economic evaluation, from the public standpoint of nation level, and the social and economic benefits which can be gained
by implementation of the project, were evaluated by comparison with the costs required for the project, and a financial
evaluation, from the enterprises standpoint of project profitability, was conducted.
1) Economic Analysis
From the Laotian national economys point of view, the economic effect that would be brought by construction and operation
of a new hydropower generation plant in Laos was measured in the Economic Analysis. Economic values of costs and
benefits were compared by the discounted cash flow method. The evaluation was carried out with the indices of Net Present
Value (NPV), which is calculated using benefits to be created by the project and its required costs, Benefit Cost Ratio (B/C)
and Economic Internal Rate of Return (EIRR).
a) Preconditions
The following preconditions were set in consideration of other power generation projects, etc. in Laos.
Economic Analysis process
The evaluation was performed via the following process.
(1) Domestic income transfer items (taxes and customs duties including VAT, subsidies, land compensations for
resettlement, interest during construction) that are only transfers between people of the nation from the national
economys point of view, and are not costs, were excluded from market prices in the calculation of costs and
benefits. Depreciation cost was not treated as cost.
(2) As shadow price is used in the calculation of costs and benefits. The costs in (i) were converted to economic cost
(Table 6.11) after division into foreign goods (traded goods) and domestic goods (non-traded goods and labor,
etc.). Standard Conversion Factor to convert the domestic goods portion such as construction costs, etc., which
were estimated based on market prices, to shadow price was 0.95 as used in other projects of international
organizations.
(3) The internal rate of return calculated by the economic cost was compared and evaluated with the opportunity
cost of capital in Laos.
6-6
Table 6.11 Economic cost of initial investment in Nam Ngiep 2C project
Table 6.11 Economic Cost of Initial Investment in the Nam Ngiep 2C project
Standard conversion factor @ 95%
Standard Conversion Factor @ 95%
b) Economic benefits
In terms of economic benefits, the value of alternative power generation which would be required if this project were not to
materialize shall be estimated. In Laos, power generation relies predominantly on hydropower though diesel power
generators have been used in rural areas for dispersed power generation. Accordingly, hydropower generation plays a
leading part in the Power Development Plan (PDP) of Laos, except for small-sized power generation that will not be
connected with the power grid. In this survey, two options for power generation other than hydropower, namely power
imports from EGAT (Electricity Generating Authority of Thailand) in Thailand, and thermal power generation, were
studied.
6-7
between Laos and Thailand, the export surplus of power from Laos to Thailand continues when it is considered as the whole
of Laos, including IPPs in Laos in addition to EDL. However, when we look at the breakdown of power exports from Laos
to Thailand, IPPs had a 94% share and EDL had only a 6% share of the total exports in 2015. If it is limited to power imports
and exports between EGAT and EDL, the tendency of import surplus over exports from EGAT to EDL continued from
2007 to 2015, except for 2011 when exports from Laos exceeded imports. In 2015, the power imports from EGAT to EDL
increased due to high growth of power demand in Laos, while the exports from EDL to EGAT decreased. A breakdown is
shown in Table 6.12 below.
TableTable
6.126.12 Electricity trade EDL
Electricity Trade between between
and EGATEDL and EGAT
Balance of Export and Import Between EGAT and EDL 2005-2015 (GWh)
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Import from EGAT to EDL 289.30 290.50 409.40 431.00 719.00 819.80 526.90 908.40 882.10 1,137.70 1,364.20
Export to EGAT from EDL 727.80 547.00 268.00 391.80 229.50 341.30 678.30 320.40 690.80 445.20 655.40
Balance=Export - Import +438.50 +256.50 141.40 39.20 489.50 478.50 +151.40 588.00 191.30 692.50 708.80
Source: Department of Energy Policy and Planning, Ministry of Energy and Mines, "Electricity StatisticsYearbook 2015 of Lao P.D.R."
Next, an increase in power imports from EGAT to EDL was assumed as an alternative power generation source to the
development of new hydropower IPP in Laos, and an Economic Analysis was conducted with such assumption. In other
words, it is verified whether avoidance of an increase in the import surplus of power from Thailand to Laos via development
of new hydropower IPP has economic rationality or not.
EDL and EGAT are currently in a mutual power interchange relationship and the tariff for power imports and exports is
shown in Table 6.6. As for the increase in power imports from EGAT to EDL which will be caused by no new development
of hydropower IPP under the constant import surplus situation of power from EGAT to EDL, EDL has to pay a Surcharge
Payment against the power import surplus in addition to Normal Import Tariff if EDL has any import surplus in the yearly
balance of power imports and exports.
Applicable tariffs in the power interchange contract between EDL and EGAT, which were confirmed with EDL in January
2017, are shown in Table 6.13. The unit price for power import from EGAT to EDL (normal time) is relatively expensive in
comparison with power export from EDL to EGAT. In addition, the Surcharge Payment against import surplus was revised
by the Government of Thailand in November 2015. Though the next revision is not yet scheduled, it was said that its level
tends to increase for these years.
6-8
Table 6.13 Electricity trade tariff between EDL and EGAT as of January 2017
Table 6.13 Electricity Trade Tariff between EDL and EGAT as of January 2017
Preconditions Tariff to be applied
The results of the Economic Analysis comparing the new development cost of hydropower IPP with avoidable cost
regarding the increase in import surplus of power from EGAT (additional payment amount from EDL to EGAT including
Surcharge Payment) are shown in Table 6.14. EIRR is 27.3%, which exceeds the 10.0% deemed as the opportunity cost of
capital in Laos, and B/C is 2.63, more than 1.0. Therefore, this project can be considered valid from the standpoint of national
society and the overall economy of Laos.
The power interchange between EDL and EGAT is performed with a much lower price level than their own domestic power
retail prices in the respective countries. For EDL, it can be said of the level that imports from EGAT could be more beneficial
than new construction of power generation facilities in Laos. However, there is a question in the appropriateness of the
estimation for the benefits as the value of power generation to be developed in Laos, based on such price level. Furthermore,
from Laos energy security point of view under the trend of an increasing import surplus of power from EGAT to EDL, it
shall be verified further whether such continuation of power imports can be considered as a premise, placing priority on
power imports from a neighboring country rather than new domestic development of power generation.
6-9
Table 6.14 Economic evaluation of Nam Ngiep 2C project /
Calculation
Table 6.14 Economic oftheEIRR:
Evaluation of the2Ccase
Nam Ngiep of/ increase
project inEIRRThe
Calculation of electricity
case imports
of Increasefrom EGAT
in Electricity Imports from EGAT
Cost Benefit
Increase
Operation Normal Normal Import Net
Construction and in Surcharge
Year and Total Import Import Surcharge Total Benefit
Reinvestment Excess Payment
Maintenance Tariff Payment Tariff
Import
Mil.USD Mil.USD Mil.USD GWh USD/kWh Mil.USD USD/kWh Mil.USD Mil.USD Mil.USD
1 8.09 0.00 8.09 0 0.00 0.00 -8.09
2 13.48 0.00 13.48 0 0.00 0.00 -13.48
3 5.39 0.20 5.59 35.51 0.0421 1.49 0.0841 2.99 4.48 -1.11
4 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
5 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
6 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
7 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
8 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
9 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
10 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
11 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
12 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
13 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
14 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
15 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
16 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
17 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
18 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
19 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
20 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
21 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
22 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
23 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
24 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
25 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
26 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
27 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
28 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
29 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
30 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
31 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
32 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
33 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
34 0.40 0.4 71.01 0.0421 2.99 0.0841 5.97 8.96 8.56
Total 26.96 12.60 39.56 94.17012 188.12 282.29 242.73
Discount Rate: 10.0% PV(Cost): 25.54 PV(Benefit): 67.19
EIRR: 27.3%
NPV: 41.644 Mil.USD
B/C: 2.63
Source:The METI survey team
Source: Study team
For calculation of the cost for an increase in the import surplus of power from EGAT to EDL (avoidable cost), the
hydropower IPP development under study was assumed to be operated as flat power generation for 24 hours a day
throughout the year (not with more power generation in the peak power demand time zone) in order to conduct the analysis
simply and the verification conservatively. The analysis was conducted on the assumption that there would be no restriction
in power transmission line capacity even if the power imports from EGAT to EDL increase, in consideration of the fact that
construction of a 500,000 V large-capacity power transmission line is planned for within a few years, and output of the
hydropower IPP supposed in this project is about 10 to 20 MW.
6-10
capacity of a hydropower IPP are represented by the construction cost averaged annually for alternative thermal power
generation and fixed costs (kW value). The energy generated by the hydropower IPP is represented by valuable costs (kWh
value) such as fuel cost, etc. of the alternative thermal power generation.
Laos is poor in fossil fuel resources other than coal. As Laos, a landlocked country, has neither any open ocean port nor any
petroleum refining facilities, the import of fossil fuels is restricted, and petroleum products are mainly for gasoline and living
fuel, and depend on imports from Thailand and Vietnam. According to an interview at a large national Laotian oil distributor,
Lao State Fuel Company (conducted in January 2017), a volume equal to about 80% of the total import volume is imported
from Thailand, and the remainder from Vietnam in the case of heavy oil (gross calorific value 9,900 kcal/g). Diesel oil has
a larger gross calorific value per unit (gross calorific value 10,700 kcal/g), but diesel oil is 6,850 LAK/L for the wholesale
price of a company in Xiengkhouang Province, versus a heavy oil price of 4,650 LAK/L (as of January 2017). This is
because consumption tax (20%) is imposed on diesel oil in addition to national tax (5% or less) and VAT (10%) but only
national tax (5% or less) and VAT (10%) are imposed on heavy oil.
As for coal, lignite and anthracite are distributed throughout Laos and the estimated reserves are 600 million tons. Good
quality lignite is produced in Hongsa of Xayabouly Province, close to the Thai border in the North, and a survey report by
the Asian Development Bank (ADB) said that it would be possible to generate power of 2,000 MW with such coal resources
(The Institute of Energy Economics, Japan Current Situation and Future Trends of Energy and Power in Laos (October
2003)). Hongsa Power Generation Plant, which is the first lignite thermal power generation in Laos, and which Ratchaburi
Electricity Generating Holding ((RATCH), a large private electric power company in Thailand), and Banpu Public
Company Limited (a large coal company in Thailand) financed jointly with the Government of Laos, started operation of
its No.1 through 3 generators (output 625 MW X 3 = 1,878 MW) gradually from 2015 to 2016. The majority of the
generated energy is exported to EGAT. As there is a redundant capacity in lignite production at Hongsa, RATCH was
sounding the Government of Laos out on additional construction of a No. 4 generator (output 626 MW). However, the
Government of Laos had not yet determined as of November 2016 whether No. 4 lignite thermal power generation shall be
added or not, because its future electric power policy is still under study. Since lignite thermal power generation has lower
mobility than diesel power generation or gas-turbine power generation, it is operated as normal base power generation.
Therefore, it is considered that lignite thermal power generation is not an appropriate alternative to hydropower generation.
Moreover, as lignite thermal power generation is assumed in the PDP as 1,500 MW or more of large-sized power generation
(capacity utilization 80%), we judged that it is not suitable for alternative power generation.
It is not easy to suppose natural gas as fuel for alternative power generation in consideration of the difficulties in import and
transportation, construction cost for the power generation, and so on.
Based on these considerations, we judged that diesel power generation with a fuel of heavy oil, which is cheaper than diesel
oil, is suitable for alternative thermal power generation. kW value and kWh were estimated as follows, based on two kinds
of diesel power generation data (from JICAs past survey results).
First, adjustment factors to compensate for the difference in the loss rates of thermal power generation and hydropower
generation were calculated for the kW value and kWh value respectively as shown in Table 6.15. Then, the kW value was
calculated from construction cost and fixed cost for 2 types of diesel generators (medium speed and low speed) and the kWh
value was calculated from fuel cost and valuable cost (Table 6.16). As a medium speed diesel generator has a relatively high
kWh value efficiency, as well as better mobility, compared with medium speed and low speed diesel generators, we decided
to adopt it for the alternative power generation. The economic benefits were estimated based on the kW value and kWh
6-11
value calculated, as well as yearly-generated energy and guaranteed output for each year.
Table 6.15 Adjustment factors for thermal plant
Table 6.15 Adjustment Facotrs for Thermal Plant
Item kW kWh Hydropower Diesel Power
Transmission Loss 6.00% a 6.00% a'
Overhaul and Maintenance 0.00% b 7.67% b'
Auxiliary Power Consumption 0.50% c 4.60% c'
Forced Outage 0.50% d 2.19% d'
kW Adjustment Factor - 1.149 e
kWh Adjustment Factor - 1.043 f
e =((1-a)*(1-b)*(1-c)*(1-d))/((1-a')*(1-b')*(1-c')*(1-d'))
f =((1-a)*(1-c))/((1-a')*(1-c'))
Source: Feasibility Study on The Sihanoukville Combined Cycle Power Development Project
in The Kingdom of Cambodia, JICA (Jan 2002)
EIRR was calculated after the development of economic costs and benefits onto the cash flow table. As shown in Table 6.17,
EIRR became 44.2%, and NPV 85.29 million US Dollars, with a discount rate of 10% and B/C 4.34 respectively.
Because EIRR greatly exceeds the social discount rate of 10%, and NPV is indicating a positive figure, we can evaluate this
project as economically feasible.
6-12
Table 6.17 Economic evaluation of Nam Ngiep 2C project /
Calculation of EIRR: the case of thermal power plant
Table 6.17 Economic Evaluation of the Nam Ngiep 2C project / Calculation of EIRRThe case of Thermal Power Plant
Cost Benefit
Operation Dependable Net
Construction and kW Capacity Annual kWh Energy
Year and Total Peak Total Benefit
Reinvestment Value Benefit Energy Value Benefit
Maintenance Capacity
Mil.USD Mil.USD Mil.USD MW US$/kW Mil.USD GWh US$/kWh Mil.USD Mil.USD Mil.USD
1 8.09 0.00 8.09 0 0.00 0.00 -8.09
2 13.48 0.00 13.48 0 0.00 0.00 -13.48
3 5.39 0.20 5.59 14.5 370.13 5.37 35.51 0.1288 4.57 9.94 4.35
4 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
5 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
6 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
7 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
8 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
9 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
10 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
11 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
12 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
13 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
14 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
15 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
16 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
17 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
18 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
19 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
20 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
21 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
22 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
23 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
24 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
25 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
26 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
27 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
28 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
29 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
30 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
31 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
32 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
33 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
34 0.40 0.4 14.5 370.13 5.37 71.01 0.1288 9.15 14.51 14.11
Total 26.96 12.60 39.56 171.7413 2236.82 288.13 459.88 420.32
Discount Rate: 10.0% PV(Cost): 25.54 PV(Benefit): 110.83
EIRR: 44.2%
NPV: 85.290 Mil.USD
B/C: 4.34
Table 6.18 shows EIRR, B/C and NPV for the four candidate projects.
Table 6.18 EIRRs for the four candidate projects
Table 6.18 EIRRs for the four candidate projects
Project Nam Ngiep 2A Nam Ngiep 2B Nam Ngiep 2C Nam Ban
Analysis EIRR B/C NPV EIRR B/C NPV EIRR B/C NPV EIRR B/C NPV
Case
(%) (Mil.USD) (%) (Mil.USD) (%) (Mil.USD) (%) (Mil.USD)
Electricity Import from EGAT 27.0 2.78 30.00 28.1 2.91 53.75 27.3 2.63 41.64 16.0 1.57 21.19
EIRR
Thermal Power Plant 43.6 4.60 60.49 40.6 4.65 102.62 44.2 4.34 85.29 25.0 2.60 59.09
Source: the METI survey team
6-13
2) Financial Analysis
a) Evaluation method
In the Financial Analysis, the financial profitability of this project was evaluated by the calculation of Financial
Internal Rate of Return (FIRR), similar to the Economic Analysis. Handling of calculation period, price escalation
and interest during the construction period is common to the Preconditions of Economic Analysis.
b) Financial costs and benefits
Benefits and costs were handled by the use of market prices. The financial costs are the initial investment amount by
market prices, and maintenance costs/facility renewal costs (if applicable) based on the initial investment. As for the
handling of transfer payments such as taxes, interest, subsidies, etc., taxes and interest were treated as costs but
subsidies were treated as benefits from the project owners standpoint. Depreciation cost was not treated as a cost as
in the Economic Analysis. In the case of the Nam Ngiep 2C project, revenues from sales of electric power to EDL,
which shall be benefits, were set at 6.7 USC/kWh from start of operation to 14th year, 5.7 USC/kWh from 15th year
to 27th year, and 6.0 USC/kWh from 28th year onward, based on the PPA concluded between EDL and sponsors.
The cost for hydropower generation royalty was set at an amount equal to 2% of total revenues from the sales of
electric power with reference to other hydropower generation projects in Laos. In addition, profit tax was set at 24%,
based on Laos Tax Law, and tax exemption period as investment incentive was set at 6 years from the start of operation.
The financial cost of Nam Ngiep 2C is shown in Table 6.19.
Table 6.19Table
Financial cost of initial investment in Nam Ngiep 2C project
6.19 Financial Cost of Initial Investment in the Nam Ngiep 2C project
6-14
d) Calculation of FIRR and analysis results
Calculation results for FIRR are as shown in Table 6.20 after development of financial costs and benefits onto the cash
flow table. FIRR became 12.03%, which exceeds the judgment index of the above WACC. Accordingly, we can also
evaluate this project as financially feasible.
Table 6.20 Financial
Table 6.20 evaluation
Financial Evaluation of theof
NamNam
NgiepNgiep 2C
2C project projectof/ Calculation
/ Calculation FIRR of FIRR
Cost Benefit
Net
Construction and Operation and Annual Tariff
Year Royalty Profit Tax Total Tariff Rate Total Benefit
Reinvestment Maintenance Energy Revenue
Mil.USD Mil.USD Mil.USD Mil.USD Mil.USD GWh US/kWh Mil.USD Mil.USD Mil.USD
1 8.52 0.00 0.00 0.00 8.52 0 0.00 0.00 0.00 -8.52
2 14.19 0.00 0.00 0.00 14.19 0 0.00 0.00 0.00 -14.19
3 5.68 0.22 0.06 0.00 5.955 35.51 6.70 2.38 2.38 -3.58
4 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
5 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
6 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
7 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
8 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
9 0.43 0.10 0.00 0.53 71.01 6.70 4.76 4.76 4.23
10 0.43 0.10 0.63 1.16 71.01 6.70 4.76 4.76 3.60
11 0.43 0.10 0.89 1.42 71.01 6.70 4.76 4.76 3.34
12 0.43 0.10 0.74 1.27 71.01 6.70 4.76 4.76 3.49
13 0.43 0.10 0.80 1.33 71.01 6.70 4.76 4.76 3.43
14 0.43 0.10 0.80 1.33 71.01 6.70 4.76 4.76 3.43
15 0.43 0.10 0.80 1.33 71.01 6.70 4.76 4.76 3.43
16 0.43 0.10 0.80 1.33 71.01 6.70 4.76 4.76 3.43
17 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
18 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
19 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
20 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
21 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
22 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
23 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
24 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
25 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
26 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
27 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
28 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
29 0.43 0.08 0.63 1.14 71.01 5.70 4.05 4.05 2.91
30 0.43 0.09 0.68 1.2 71.01 6.00 4.26 4.26 3.06
31 0.43 0.09 0.68 1.2 71.01 6.00 4.26 4.26 3.06
32 0.43 0.09 0.68 1.2 71.01 6.00 4.26 4.26 3.06
33 0.43 0.09 0.68 1.2 71.01 6.00 4.26 4.26 3.06
34 0.43 0.09 0.68 1.2 71.01 6.00 4.26 4.26 3.06
Total 28.39 13.55 2.85 17.05 61.835 2236.82 197.90 138.15 138.15 76.32
FIRR: 12.03%
6-15
3) Sensitivity analysis
Sensitivity analysis was conducted for a case in which any precondition of the Economic Analysis or Financial Analysis
changes. The analysis was conducted for the Nam Ngiep 2C project on the assumption of the following cases.
a) Sensitivity analysis in Economic Analysis
As shown in Table 6.22, it was indicated that even Case 3, which has the most severe preconditions, is economically
feasible as EIRR exceeds the discount rate in either case, irrespective of alternative power generation, i.e. increase in
power imports from EGAT or alternative thermal power generation.
6-16
6-17
Capter7 Planned Project Schedule
(1) Nam Ngiep 2C2B2A
Due to the fact that a common sponsor is undertaking Nam Ngiep 2C, 2B and 2A, it is more effective and sensible to bundle 2C
(commercially commissioned in December 2016), and 2B and 2A (both under construction) into one project. The sponsor has
made an investment in these three projects with its own equity, partially with the governments concessional finance. The sponsor
intends to move on to the development of larger projects based on its experience in the construction and management of these
medium-sized projects. The sponsor would like to secure development funds quickly by monetizing part of the equity, by selling
off to strategic partners and debt financing. The following exhibit presents the implementation schedule for the Japanese
sponsors equity participation in the project. It is noted that if the project company needs external debt financing, it should re-
negotiate the current PPA into a more bankable one.
Sep
Dec 2016 Apr Jun Share Purchase Dec After 2018
2C COD Due Diligence PPA Renegotiation Agreement Loan Agreement COD for 2B/2A
Now
After 2018
Year 2017
Source: Study Team
NOW
Year 2017 After 2018
7-1
Capter8 Present Status of Legal Improvement regarding
Implementation of IPP Projects in Lao PDR
(1) Relevant laws
1) Law on Electricity (2011
(a) Concession business
The Law on Electricity provides for that both public and private sectors in general are allowed to conduct electricity business
in generation and transmission, subject to concessions granted by MPI in accordance with the Law on Investment
Promotion.
(b) Approval authority
Approval authority for power generation projects is fourfold by the Law on Electricity.
Standing Committee of National Assembly
Generation capacity: more than 100MW, or projects with reservoir areas with more than ten thousand
hectares, or projects with severe socioeconomic and natural impacts
Government
Generation capacity: more than 15MW, up to 100MW
Provincial or city governor
Generation capacity: more than 0.1MW, up to 15MW
District or municipal governor
Generation capacity: up to 0.1MW
(c) Investment forms
The Law on Electricity provides for four investment forms in the electricity business. Relevant to IPPs
business is BOT, BT and BOO.
Build, Operate and Transfer (BOT)
Build and Transfer (BT)
Build, Operate and Own (BOO)
Directly by the state through State Owned Enterprise (SOE)
(d) Concession period
The Law on Electricity limits concession periods up to 30 years after commercial operation dates (CODs), and provides
that, after the concession period, the facilities shall be transferred to the state at no cost.
(e) Concession procedure
The Law on Electricity subdivides concession procedure into three as follows.
Memorandum of Understanding (MOU)
The Law is silent on the length of MOUs, which is generally good for 18 months, but stipulates that the
extension thereof cannot extend more than 9 months. Usually pre-feasibility studies are conducted during the
validity of MOUs.
Project Development Agreement (PDA)
The Law is silent on the length of PDAs, but stipulates that the extension thereof cannot extend more than 6
months, and the number of extensions for export and domestic projects are limited up to, respectively, 3 and
2 times. Usually detailed feasibility studies are conducted during the validity of PDAs.
Concession Agreement (CA)
8-1
CAs are valid for up to 30 years after CODs, and the Law stipulates that the construction can be commenced only after
CAs are effectuated. In general, CAs explicitly defines concessionaires rights and obligations including royalty,
corporate income tax, and, if any, fiscal incentives.
(f) Exemption from Concession Agreement and Foreign Limit
The Law on Electricity provides for that the following three businesses need not to secure concessions, and
the small hydropower projects with generating capacity of less than 15MW are only available for Lao
citizens.
Businesses by the state through SOEs
Small hydropower projects with generating capacity of less than 15 MW and with no significant social and
environmental impact
Renewable energy projects with generating capacity of less than 0.5MW
(g) Land provision
The Law on Electricity stipulates that the government shall provide concessionaires with necessary land use rights in
accordance with the Law on Land.
8-2
The Law on Investment Promotion categorizes investment into three as follows. Electricity business
including IPPs fall into the second category of concession business.
General business
Concession business
Development business of special and specific economic zone
(b) Investment type
The Law on Investment Promotion subdivides investment type into three as follows.
Investment solely by Lao investors or foreign investors
Joint venture by both Lao and foreign investors (wherein foreign investors share in equity must be more than 10%)
Business cooperation agreement between Lao and foreign investors (without incorporation of juristic person in joint
venture)
(c) Investment incentives
The Law on Investment Promotion provides for three level of fiscal incentives per priority and location. Power generation,
however, is not vested with explicit or outright fiscal incentives by the Law, but CAs, SHOAs or similar agreements
occasionally and variably give certain incentives to investors.
8-3
2) Ministry of Planning and Investment (MPI)
At MPI, Investment Promotion Dept. (IPD) takes charge of electricity concession businesses including IPPs. More precisely, for
instance, IPD is responsible for endorsing project approvals to the government or the Standing Committee of National Assembly
with prior technical consent from MEM.
IPD functions as the one-stop service for investors, and facilitates to process company registration, concession registration and
taxpayer registration, among other administrative necessities.
3) Province and Vientiane Capital
Power development project with generating capacity of less than 15MW is approved by provinces and Vientiane capital city,
depending on location, and its procedures and requirements vary among provinces.
The study team visited several provinces and obtained information on existing MOUs, as exhibited in Table 8.1, and found there
were expired and extended MOUs. Extension thereof seemed to be easily given after concise reasoning. Moreover, in a few
provinces, projects profiles were intentionally scattered into less than 15MW, so as to avoid the approval necessity from the
central government.
8-4
governmental financial institutions are most likely unable to take the off-taker risk of EDL yet. It is inevitable, therefore, to secure
the Lao governments guarantee onto the EDLs payment obligation under PPAs, so that Japanese electric power companies and
governmental financial institutions can participate into the domestic IPPs projects, respectively, as sponsors and lenders.
By now only a few domestic IPPs projects with generation capacity of more than 100MW have secured the governmental
guarantee, according to EDL. However, when Japanese electric power companies invest into domestic IPPs, the governmental
guarantee shall be the prerequisite even for smaller generation capacity.
Companies
1) Insufficient regulatory arrangement
The Law on Electricity gives the approval authority to the central government and provinces or city, respectively, more than
15MW and up to 15MW in generation capacity. Coordination and information sharing between the central government and
provinces/city is not necessarily sufficient, and consequently duplicated projects approval takes place in the adjacent areas on the
same river flow.
The draft amendment of the Law envisages to limit the approval authority of provinces and city up to 2MW. As there are not so
many projects with less than 2MW, the chance of duplicated projects approval shall be significantly decreased, should the draft
amendment pass. Nevertheless, the coordination and information sharing between the central government and provinces and city
needs to be strengthened anyway.
2) Deregulation request
The Law on Electricity provides for that power development projects with generation capacity of up to 15MW are reserved for
Lao citizens (which may implicitly include juristic persons which are majority owned by Lao). Japanese electric power
companies may also invest in a project up to 15MW or a set of such projects in the cascaded manner, hence may want to request
for deregulation on this nationality limitation.
8-5
Capter9 Activities of Key Local Sponsors and the Off-
Taker
(1) Sponsor (EDL-Gen)
The previous Law on Electricity did require the government to invest in the IPPs as part of sponsors, and hence even after its
amendment in 2011 it is still common that the governmental organization takes part of IPPs as sponsor. Currently there are full
or quasi state owned enterprises which invest into IPPs as sponsor: EDL-Gen and LHSE. However, LHSE invest in export
oriented IPPs whose majority market is offshore. Besides, several private sponsors are examined in Chapter 4. This subchapter
hence pertains to EDL-Gen only.
1) Outline of EDL-Gen
EDL-Gen is a public company incorporated under the Law on Enterprise by transferring the generating asset and corresponding
liabilities which were previously owned and operated by EDL. EDL was listed in 2011 in Lao Stock Exchange. EDL-Gens 25%
of shares have been sold to investors in the capital market, but the remaining 75% is still owned by EDL, its parent company.
As of June 2016. EDL-Gen has 732 directors and employees and owns, operates and maintains 10 hydropower facilities with
total generation capacity of 1,131MW. All of these hydropower facilities sell its generated electricity exclusively to EDL.
According to EDL-Gens business plan, it plans to increase the total generation capacity to more than 2,200MW by 2020, by
further transfer of hydropower plants from EDL and by constructing new ones.
2) Sponsorship of EDL-Gen
As of June 2016, EDL-Gen has equity investments into 5 IPPs. Lower Houay Lamphan is the only project developed by EDL-
Gen, and other five hydropower plants have been transferred from EDL.
Theun Hinboun (220MW, equity share 60, off-taker EGAT)
Houay Ho (152MW, equity share 20, off-taker EGAT)
Nam Gum 2 (615MW, equity share 25, off-taker EGAT)
Nam Lik 1-2 (100MW, equity share 20, off-taker EDL)
Nam Ngum 5 (120MW, equity share 15, off-taker EDL)
Lower Houay Lamphan (15MW, equity share 60, off-taker EDL)
According to EDL-Gens business plan, it plans to buy out 11 IPPs shares still held by EDL and to develop another series of IPPs
by itself.
9-1
plan to privatize or unbundle it.
2) Off-taking by EDL
Type of IPPs with EDL as off-taker can be twofold: EDL as main off-taker, and EDL as marginal off-taker (in which case there
is other main off-taker such as EGAT in Thailand). For IPPs with EDL as main off-taker, those under construction outnumbers
operating ones in project number and generation capacity, as of June 2016.
1) Take-or-pay clause
Majority of EDLs PPAs effectively entail the take-and-pay clause, whereby EDL pays only for the volume of electricity
generated and bought at the predetermined unit cost. In turn, only a few PPAs, with generation capacity of more than 100MW,
have the take-or-pay clause, whereby EDL pays out predetermined amount of fee, regardless of the volume of electricity
generated and bought, at least for the period of loan tenure.
When Japanese electric power companies invest in domestic IPP as sponsor, it is inevitable to secure the take-or-pay clause,
regardless of the generation capacity, in order for obtaining project financings from Japanese governmental financial institutions
and their possible co-lenders.
2) Settlement currency
The model PPA and MEMs Regulation on Domestic IPPs Purchasing Price (May 2016) use USD as the denomination currency.
However, as an example, the model PPA exhibits its settlement currency as follows.
1 to 12 year USD 70, LAK 30
13 to 27 year USD 20, LAK 80
EDL says that the formula, though example, is intended to minimize the currency risk, as the EDLs receivables from
distribution business is essentially in LAK. However, as far as the contracted price is denominated or determined (and regulated)
in USD, even if settlement currency is LAK, then the currency risk is not alleviated. Rather it is likely that debt financing of IPP
project companies are disadvantaged by the portion of LAK, which has virtually no circulation outside the country. When
Japanese electric power companies invest in IPP as sponsor, it is inevitable to secure all or almost all settlement in USD, or in
another word, minimal to zero settlement in LAK.
9-2
By the way, change in proportion between USD and LAK at 12-13 years implies that the debt financing tenures for existing IPPs
for domestic market average the same period more or less. This is in general much shorter than debt financing tenures by Japanese
governmental financial institutions and their possible co-lenders.
9-3
Capter10 Activities of Other Local Investors
(1) Activities of investors who have concluded MOUs
According to the June 2016 IPP project list obtained from MEM, there are about 130 companies that have concluded MOUs,
and most of them have constructed roads, bridges, and dams in Laos. They are domestic companies in Laos who are engaged
in manufacturing and construction related to the construction industry or electric power business. Many companies are
diversified, with interests such as the urban development business, real estate industry, and agriculture, in addition to the power
generation business and construction industry.
Few companies have completed hydroelectric power plants. According to the IPP list, the number of IPP companies with
hydraulic power plants in operation is about 30, more than half of which are foreign companies that invest in large capacity
power plants. As investors, there are limited businesses with construction experience in hydropower plants (including those
under construction).
Opportunities to enter the hydroelectric power generation business are often gained through connections, with the government
and EDL, due to power-related work such as dam construction. Although they have the technologies required for the
construction of dams, due to the lack of funds construction is not progressing.
Other investors apart from domestic enterprises in Laos are companies from Thailand, Vietnam, China and other neighboring
countries, but they mainly invest in hydropower development projects for export abroad.
investors
The total number of IPP hydroelectric power plants already in operation in Laos has reached 40, but the number of IPP
operators that are in operation, such as EDL-Gen, are limited. For other investors, the site development situation is that some
investors are steadily starting construction after implementing FS, while others have no prospect of procuring the necessary
funds for construction. The fund procurement situation depends greatly on the project, and considerable differences were seen
depending on the case. They are looking for joint developments with other businesses, including businesses outside of Laos,
as they have insufficient funds due to other projects owned by investors and financing with other hydraulic project
developments. There are many such cases.
In developments up to FS and construction, there were many cases using manufacturers and research companies with
considerable global hydraulic development experience, such as in Europe, China, and India.
10-1
implement the construction of the first project with their own funds, there is a danger that funds to advance the next project
will be lacking.
From a technical aspect, there were cases in which access to the site could not be gained due to the weather in some areas,
with few access roads to the site, such as in Phongsaly province, so the survey did not progress as expected.
10-2
10-3
Capter11 Technical Advantages of Japanese Company
11-1
(1) Possible participation forms for Japanese companies
Participation forms for hydropower IPP projects in general can be threefold: i) sponsorship, ii) construction and equipment, and
iii) operation and maintenance. On the premise that Japanese companies as sponsors shall invest in the equity of project
companies, the possible participation forms for Japanese companies can be generalized as follows.
1) Sponsorship
Sponsorship of IPPs means that Japanese companies invest in the equity of project companies. Lao companies holding
concessions as well as full or quasi-state owned companies such as EDL-Gen and LHSE may also jointly invest.
The proportion of the equity shares is subject to negotiation with other sponsors, but Japanese companies may want to invest and
hold at least 30% of the equity so that they can have a certain controlling power in the development and operation of the IPP
project company.
11-1
together with process management and form control. For quality control, in Japan, management is carried out according
to the test items, test methods and test standards stipulated in the quality management standards, and it is confirmed
whether or not each actual measured (test/inspection/measurement) value satisfies the standard value. Lao Electric
Power Technical Standards (Lao Electric Power Technical Standards) are in place for the development of power in
Laos, and compliance with design and construction standards is mandated. However, in the study of a construction site
during the second survey, there was no evidence that tests and the like for quality control are being carried out and the
construction quality at the same construction site also showed differences, so there is concern that the quality control
based on the basic standards/viewpoints is not sufficient. At hydropower plants in Japan, periodic inspections, cleaning,
and small-scale repair are carried out about every three years after starting operation. Practicing appropriate
maintenance activities to maintain the functions of these facilities enables early detection of abnormal symptoms,
extension of large-scale repair cycles such as those for water wheel runners and reduction of outage periods due to
planned repair schedule adjustment.
From this, it seems that Japanese companies have superiority in terms of quality assurance and management, such as
in civil engineering.
11-2
Photo 11.1 D3 dam at Nam Ngiep 2C
11.2 NamNgiep2C
11-3
(b) Enhancement of construction management system
In recent years, construction work, including that for power generation facilities, has been rapidly progressing in Laos, and
demand for local construction companies is increasing. However, it was also pointed out in a past survey report that local
workers are less conscious of securing process, even after working overtime (Laos National Small Hydroelectric Power Project
Preliminary Survey Report, March 2013, International Cooperation Organization, p. 3-4). For a Japanese company, it is
necessary to confirm the construction progress at the facility, compare it with the initial process, confirm the procurement
situation regarding equipment and materials, identify the process delay factors, and carry out confirmation and adjustment at
regular step process meetings. Extension of the construction period will increase personnel expenses, equipment costs, etc.,
which will cause a deterioration of economic efficiency, so construction control and process control are extremely important.
For this reason, in terms of construction management and process control in construction, Japanese companies are considered
to have superiority.
11-5
2) Non-technical Disadvantages
(a) Construction Period
In ODA projects mainly in Southeast Asia, few projects use special methods with dominant differences in technologies, such as
special bridges, underwater structures, PCs, etc. Countries other than Japan have also increased their abilities and carry out ODA
projects with no difference in technical level. Of the composition of construction cost, although material costs and labor costs are
not very different, there is a possibility that the construction period will be the greatest difference. In the case of Japan, various
inspections (reinforcing bars, formworks, concrete, etc.) are carried out according to the directions of the ordering side as the
construction progresses. Moreover, since the schedule for the actual examination is made to accommodate the inspector, there
are many cases in which waiting times cause delays in the construction period. (The construction company wants to proceed
quickly, but must wait for inspectors.) Although it is possible that the construction period in other countries is shorter, streamlining
the inspections, these companies will not possess Japanese know-how, and shortening the construction period can cause inferior
work.
(d) Method of responding to trouble that occurs during the construction work
In Japan, we act on the basis of compliance with laws and regulations, and it takes time for surveys, procedures and compensation
based on laws and ordinances. However, in other countries, cases such as trouble-handling on the compensation side are resolved
quickly. As for the speediness of response to trouble, there is concern that Japanese companies will be inferior.
11-6
3) Good practice power generation project by Japanese company in Laos
To serve as a reference when a Japanese company performs IPP business in Laos, a Japanese company (TEPCO) conducted an
investigation of the Houay Xe hybrid power system project, which was implemented in Laos in 2005.
1. Project outline
Contracted to TEPCO from the Japanese governments affiliate NEDO (the New Energy and Industrial Technology
Development Organization), a demonstrative research project on a small scale pumped-storage power generation system with
photovoltaics was carried out.
(1) Project name
The Demonstrative Research Project on Small-Scale Pumping Power Generation System in Lao Peoples
Democratic Republic
(2) Purpose of this study
Construction of a hybrid generation system with clean energy.
Conventional system is solar Generator + Battery + Diesel Generator.
Oudomxay
Project Site
Vientiane
11-7
2System configuration
An outline of the system, which combined photovoltaics, micro hydropower generation, and a storage pump, is as follows.
Transformer Load
Outline of the System
Dam facilities
Water Intake
Upper Dam: Concrete gravity type
Dummy Load Governor
(H:4.3m,W:13.15m)
Lower Dam: Concrete gravity
Head Race
type(H:1.6m,W:18.4m)
Upper Reservoir
Upper reservoir: (Storage Capacity14,000t)
Photovoltaics generation system 100kW
Penstock
Water Flow
Solar modules number of 880
Power Flow
Spill Way Turbine
Generator Pump Hydro power generation system 80kW
Micro Tubular Turbine. Number of 1
Lower Dam
k
Lower Reservoir Maximum net Head19.3m(Maxflow0.57m3/s)
k k
3Construction schedule
H15
FY2003 H16
FY2004 H17
FY2005
10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9
Survey/Design
Civil Construction
Electro-mechanical
Design Change
Commissioning
Data Analysis
Final Workshop Dec 2005
11-8
This project is considered to be a success model for hydro-power generation business undertaken by Japanese companies in Laos.
In order to be able to request local residents to perform operation and maintenance (O&M), we had them participate in the
construction from the construction phase in this project.
When Japanese companies undertake IPP business in Laos, they may request O&M from local residents.
As in the Houay-xe hybrid power project, we think that the building of friendly relations with local residents will enable them to
perform O&M smoothly following commencement of commercial operation.
11-9
Hydrographs of Specific Daily Mean Discharge at the Nam Hai/Composite 2Cb-SSN and Nam
4-9 Figure 4.4
Ngiep/Muong Mai Stations
4-11 Figure 4.6 Catchment Areas of Dam Site and Meteorological Station (M.Ngoy)
4-12 Figure 4.7 Locations of Meteorological Stations
4-12 Table 4.6 List of Rainfall Stations Scattered in the Surrounding Project Area
4-13 Table 4.7 Generated Monthly Runoff of Nam Ban Basin at Dam Site
4-15 Table 4.9 Comparison of Catchment Area at Nam Ngiep Site
4-16 Figure 4.8 Catchment Area of Nam Ngiep Site Measurement Chart with 1/150,000 Topographic Map
4-17 Table 4.10 Comparison of Catchment Area at Nam Ban Site
4-17 Figure 4.9 Catchment Area of Nam Ban Site Measurement Chart with 1/150,000 Topographic Map
4-19 Figure 4.10 Composite 2Cb-SSN and Muong Mai Hydrometric Stations
4-19 Figure 4.11 Mean Discharge of Nam Ngiep Area
4-20 Table 4.11 Long Term Discharge table in Each Area of Nam Ngiep
4-26 Table 4.14 Salient Features of Nam Ngiep 2A, 2B, 2C
4-27 Table 4.15 Salient Features of Nam Ban
4-29 Table 4.16 Comparison of Head Loss and Install Capacity at Nam Ngiep 2A
4-30 Table 4.17 Comparison of Head Loss and Install Capacity at Nam Ngiep 2B
4-30 Table 4.18 Comparison of Head Loss and Install Capacity at Nam Ngiep 2C
4-31 Table 4.19 Comparison of Head Loss and Install Capacity at Nam Ban
4-35 Table 4.23 Comparison of Various Material Costs Between Laos and Japan
4-35 Table 4.24 Comparison of Various Labor Costs Between Laos and Japan
4-38 Table 4.25 Comparison with F/S construction cost
4-43 Table 4.26 Comparison of F/S Construction Cost and Construction Cost Based on Japanese Guidance
6-1 Table 6.1 Comparison of project costs of proposed projects
6-2 Table 6.2 Details of Project costs for Nam Ngiep 2A
6-2 Table 6.3 Details of Project costs for Nam Ngiep 2B
6-3 Table 6.4 Details of Project costs for Nam Ngiep 2C
6-3 Table 6.5 Details of Project costs for Nam Ban