CDB provides loan for Northern Province Power Grid Project

Project narrative

On March 28, 2013, China Southern Power Grid (南方电网云南国际公司 or SCG) and Électricité du Laos (EDL) — the state corporation of Laos that owns and operates the country's electricity generation, electricity transmission and electricity distribution assets — signed a $302,138,900 commercial (EPC) contract for the Northern Province Power Grid Project. Then, with approval from EDL, Yunnan International Co., Ltd (YNIC) and SCG formed a joint venture to finance, develop, and construct the Northern Province Power Grid Project on September 22, 2013. China Development Bank issued a loan to the joint venture. The face value and borrowing terms of the loan are unknown. The purpose of the project was to put an end to the history of an isolated power grid operating in northern Laos, forming an integrated nationwide high voltage backbone grid. The project spanned four provinces: Louang Namtha, Phongsali, Oudomxay and Luang Prabang. It supported four substations (Pak Mong 2 Substation, Namo 2 Substation, Luang Prabang 2 Substation and Bountai Switching Station) and five transmission lines (Luang Prabang 2～Pak Mong 2 T/L, Pak Mong 2～Nam Ou 2 T/L, Pak Mong 2～Namo 2 T/L, Namo 2 T/L～Bountai T/L, and Namo2～China-Laos Border T/L), with a total transforming capacity of 240MVA and a total length of 596 km. SCG was the EPC contract responsible for implementation. Construction began on March 17, 2014. Then, on September 27, 2015, the project achieved successful synchronization and operation of three substations. The project was officially put into operation on November 29, 2015. Then, on June 14, 2016, EDL officially signed a Service Agreement on Technical Support for Safe and Stable Operation of Electricite du Laos with Yunnan Power Grid Co., Ltd. and Yunnan International Co., Ltd. Under the agreement, Yunnan Power Grid and Yunnan International agree to provide EDL with one-year of free technical training on the safe and stable operation of Laos’ power grids, so as to help EDL improve its capability of and technology for securing power grid operations.