China Eximbank pledges $1.7 billion loan for 1320MW Pak Lay Hydropower Project

On June 11, 2007, Sinohydro signed a Memorandum of Understanding (MoU) with the Government of Lao PDR regarding the 1320MW Pak Lay Hydropower Project. This project involves the construction of a dam that is 630 meters long, 35 meters high, with a 108 sq km area. 5,010 people would need to be resettled as a result of the dam, although there is a proposal under consideration to reduce these resettlement impacts. There are also concerns that the dam along the Mekong river would seriously adversely affect the environment as the Mekong river is the site of a major inland fishery. As of 2009, the project was undergoing feasibility studies. Then, on August 25, 2017 a feasibility study report was approved by the Lao Government. Then, in 2018, PowerChina Resources and China National Electronics Import & Export Corporation (CEIEC) proposed to develop the $2.134 billion project under a build-operate-transfer model with a $1.7 billion loan provided by China Eximbank. At that time, construction was expected to start in 2022 and commercial operations were expected to begin in 2029. However, the project faced major delays and the proposal from PowerChina Resources and China National Electronics Import & Export Corporation petered out. Then, on January 26, 2022, Sinohydro and Gulf Energy Development — a Thai power producer — announced plans to create a joint venture to finance, design, implement, and manage the $2.1 billion Pak Lay hydropower project in northwestern Laos. The project, by that point, had been designed from a 1320MW run-of-the-river dam on the Mekong River in Pak Lay, Xayaburi to a 770MW run-of-the-river dam on the Mekong River in Pak Lay, Xayaburi. Pak Lay is among the projects pushed forward by the Laotian government to sell electricity to neighboring countries such as Thailand. Thai state-owned utility Electricity Generating Authority of Thailand (EGAT) had been in the running to be an offtaker with a tariff price at Bt2.69 per kWh. However, in September 2021 EGAT said it had not decided whether to purchase additional power generated from the new dam projects in Laos and may not sign the PPA.

Additional details

1. This project is also known as the Pak Lay BOT Project. The Chinese project title is 老挝芭莱水电站项目. 2. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it identifies this project as being supported by a $90 million China Eximbank loan commitment. However, AidData has not identified any evidence that a loan agreement with China Eximbank was ever finalized.

Number of official sources

11

Number of total sources

31