China Development Bank provides $119.3 million buyer’s credit loan to 100MW Nam Lik 1-2 Hydropower Project (Linked to Project ID#63104)

On May 5, 2006, China International Water & Electric Corporation (CWE) and the Lao Government signed a Nam Lik 1-2 Hydropower Project Development Agreement. Then, on October 30, 2006, China’s National Development and Reform Commission approved the project. On November 19, 2006, CWE and EDL-Generation Company Limited (EDL-Gen) signed a Shareholder Agreement (SA) and the Power Purchase Agreement (PPA) for the 100MW Nam Lik 1-2 Hydropower Project. Then, on April 2007, China’s Ministry of Commerce obtained the approval of the establishment of Nam Lik 1-2 Power Company Limited, a special purpose vehicle and joint venture between CWE (80% ownership stake) and EDL-Gen (20% ownership stake). On November 24, 2008, China Development Bank and Nam Lik 1-2 Power Company Limited signed a $119,300,000 buyer’s credit loan agreement for the 100MW Nam Lik 1-2 Hydropower Project (captured in Project ID#33790). The loan carried the following terms: a 8% interest rate, a 18 year maturity, a 0.25% management fee, a 0.25% commitment fees, and a 5.99% insurance premium. The borrower purchased buyer’s credit insurance from Sinosure. The $149.2 million project was implemented on a build–own–operate–transfer (BOOT) basis and financed according to an 80:20 debt-to-equity ratio. The equity contribution from CWE is captured in Project ID#63104. CWE signed a 30-year concession agreement with the Government of Laos on October 31, 2006. According to the agreement, CWE will transfer the project to the Lao government after a 4.5 year construction period and 25 years of operation. All the power generated from the Nam Lik 1-2 Hydropower Project is to be supplied to EDL in accordance with a Take-or-Pay commitment over a 25 year period. The Nam Lik 1-2 Hydropower Project is located on the Nam Lik River, about 50km upstream of the Nam Lik Bridge of Road No.13 at B.HinHeup, northwest of Vientiane city. The approximate coordinates of the project site are: 18.7897°N, 102.1233°E. The project is a diversion hydropower station with an designed installed capacity of 100 MW (100,000 kW) (2 Units x 50 MW), an average annual power generation of 435 million kWh, and an initial electricity price of 4.68 cents/kWh. Construction activities included a concrete faced rock-fill dam, auxiliary dam, over-year regulation reservoir, spillway tunnel, flood discharge tunnel, diversion system, power house and transmission system. The power generated by the two 50 MW generators were to be supplied to Ban Don substation and Hin heup substation through 115kV transmission lines respectively and then distributed in Lao Power Grid. According to CWE, a groundbreaking ceremony was held on December 21, 2007, and a power generation ceremony was held on August 29, 2010.

Additional details

1. This project is also known as the 100MW Nam Lik 1-2 HPP. 2. The Chinese project title is 南立1-2水电站项目 or 老挝南立项目 or 老挝南立1-2水电站. 3. The Lao project title is ເຂື່ອນໄຟຟ້ານ້ຳລີກ. 4. The CDB loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 5. The 8% interest rate that AidData records is an estimate reported by the borrower (to the UNFCCC-CDM). However, the loan’s actual interest rate was a floating market rate tied to LIBOR plus an unknown margin. 6. Électricité du Laos (EDL) is the state corporation of Laos that owns and operates the country's electricity generation, electricity transmission and electricity distribution assets. The company also manages the import and export of electricity from the national electricity grid of the country. EDL-Generation Company Limited (EDL-Gen) was incorporated in 2010 and operates as a subsidiary of EDL.

Number of official sources

15

Number of total sources

28