China Development Bank provides $242.7 million loan for 180MW Nam Ngiep 2 Hydropower Plant Project (Linked to Record ID#63758)

Project narrative

On August 25, 2010, China International Water & Electric Corp (CWE) and the Government of Laos signed a Nam Ngiep 2 Hydropower Plant Project Development Agreement. Then, on June 16, 2011, Nam Ngiep II Power Company Limited — a special purpose vehicle and joint venture between CWE (90% ownership stake) and EDL-Gen (10% ownership stake) — and Électricité du Laos (EDL) signed a Shareholders Agreement. On October 19, 2011 EDL and CWE signed a commercial (EPC) contract for the Nam Ngiep 2 Hydropower Plant Project. China Development Bank then issued a $242.7 million loan to Nam Ngiep II Power Company Limited (also known as Laos Nam Ngiep 2 Hydropower Co., Ltd.) on or around August 1, 2013 to support the implementation of the Nam Ngiep 2 Hydropower Plant Project (captured via Record ID#63757). The proceeds of the loan were to be used by the borrower to partially finance the EPC contract between EDL and CWE. The loan, which was backed by a partial repayment guarantee from the China International Water & Electric Corporation (CWE), carried a maturity of 16 years. It other borrowing terms are unknown. The purpose of the project was to construct a 180MW hydropower station (with three 60MW hydro turbines) on the Nam Ngiep River in the southeastern province of Xieng Khouang province, about 70 kilometers from the provincial capital of Phonsavan. The project involved the construction of a transfer weir on the Nam Ngiep River, a 7.4 km long transfer tunnel, a 70 meter high earth rock dam on the Nam Sen, a 10.9 km long headrace tunnel, a surface power station on the Nam Siam equipped with 3 x 60 MW Francis turbines and generators, and a 230 kV transmission line to the Tha Vieng substation. The power station was built to provide electricity for industrial purposes and urban growth, and also provide irrigation water for agricultural development. Upon completion, the power plant was designed to have capacity to generate 723 million kWh per of electricity annually. The approximate coordinates of the project site are: 19.1262°N, 103.3186°E. CWE was the EPC contractor responsible for implementation. On December 8, 2010, the Government of Laos approved the environmental impact assessment (EIA) for the project. Then, on December 23, 2011, a groundbreaking ceremony was held. The project was completed during the first week of April 2015. The hydropower station was put into operation on October 2, 2015. According to EDL managing director Sisavath Thiravong, the Nam Ngiep 2 power plant is expected to generate about $43.38 million of revenue per year. The project was implemented on a build–own–operate–transfer (BOOT) basis and financed with a mix of debt and equity. CWE’s equity contribution is captured in Record ID#63758. Nam Ngiep II Power Company Limited signed a 25-year concession agreement with the Government of Laos on August 18, 2011. According to the agreement, Nam Ngiep II Power Company Limited will transfer the project to the Government of Laos after 25 years of operation.