Narrative
Full Description
Project narrative
On September 8, 2016, during Premier Li Keqiang's visit to Laos, China Eximbank and the Lao Ministry of Finance signed a $600 million preferential buyer’s credit (PBC) agreement for the 240MW Nam Ngum 4 (NG4) Hydropower Project (as captured via Record ID#63452). Électricité du Laos (EDL) — the state corporation of Laos that owns and operates the country's electricity generation, electricity transmission and electricity distribution assets — became the effective borrower of the loan. The borrowing terms of the PBC are unknown. However, it is known that the borrower was to use the proceeds from the PBC to finance 85% of the cost of a $706 million EPC contract between EDL and China National Heavy Machinery Corporation (CHMC), which was signed in late 2015. Then, on June 23, 2017, the Shanghai Branch of MetroBank, Maybank, Bank SinoPac, E.SUN Commercial Bank of Taiwan, and Sinomach Finance Co., Ltd. (国机财务有限责任公司) signed a $100 million syndicated loan agreement with EDL for the 240MW Nam Ngum 4 Hydropower Plant Project. The borrowing terms of the loan are unknown. Nor is it known how the borrower was expected to use the loan proceeds. The purpose of the project is to construct the 240MW Nam Ngum 4 (南俄肆) hydropower plant with three 80MW turbines (power generation units) and a 74-meter high dam with water storage capacity of 107,400,000 cubic meters. The project also involves the construction of a 17 km tunnel. The project site is located approximately 10 km west of a proposed slaughterhouse site near the confluence on Nam Kho River and Nam Ngum River in Paek District and Xiangkhoang Province. Its precise locational coordinates are as follows: Latitude: 19°5'2.04"" and Longitude: 102°52'46.56”. CHMC is the EPC contractor responsible for implementation. It appears to have hired VLV Xoumphonphakdy (a Lao company) as a subcontractor. Construction began on January 25, 2018. River closure occurred on October 15, 2019. Then, on February 15, 2021, a 200 ton bridge crane at the Nam Ngum 4 Hydropower Plant successfully completed a load test. As of May 2022, the project had achieved a 90% completion rate. Then, on February 1, 2024, dam impoundment took place. The concrete lining of the diversion tunnel took place on March 10, 2024. Power generation unit #1 began trial operations on July 6, 2014. Power generation unit #2 began trial operations on July 13, 2024. Power generation unit #3 began trial operations on July 28, 2024. The power plant's commissioning was originally scheduled for July 2024.
Staff comments
1. This project is also known as the Nam Ngum 4 Hydropower Project and the NG4 Project. 2. The Chinese project title is 南俄4水电站项目 or 南俄肆. 3. In 2017, the World Bank reported that EDL was seeking to divest its ownership in NG4 and NG3 (captured via Record ID#63450) in order to reduce its indebtedness. These divestments were expected to provide substantial financial relief to EDL as its NG3 and NG4 project debts amounted over $1 billion by 2017. However, it is unclear if the China Eximbank project debt for NG4 has been transferred from EDL to a different entity. This issue merits further investigation. 4. The precise monetary value of Sinomach Finance Co., Ltd.’s contribution to the $100 million syndicated loan is unknown. For the time being, AidData assumes equal contributions ($20 million) across the five members of the syndicate. This issue warrants further investigation.