ICBC provides $100 million loan for 45 MW Nam Phoun Hydropower Project

In June 2015, SOK Corporation and the Government of Laos (GOL) began negotiations on a Project Development Agreement (PDA) for the 45 MW Nam Phoun Hydropower Project. Negotiations on the PDA were completed in March 2016. Then, in May 2016, Nam Phoun Power Company Limited (NPPC) — a special purpose vehicle (SPV) and joint venture between EDL-Generation Company Limited (EDL-Gen) [51% equity stake] and SOK Corporation [49% equity stake] — was created to support the implementation of the 45 MW Nam Phoun Hydropower Project. Six months later, on November 18, 2016, Nam Phoun Power Company Limited (NPPC) and Power China Chengdu Engineering Corporation Limited signed a commercial (EPC) contract worth $99,998,918 for the 45 MW Nam Phoun Hydropower Project. Then, on March 22, 2018, the Industrial and Commercial Bank of China (ICBC) and Électricité du Laos (EDL) — Laos' state-owned power company — signed a $100 million loan agreement for the 45 MW Nam Phoun Hydropower Project. The borrowing terms of the ICBC loan are unknown. However, it is known that the borrower was to use the proceeds of the loan to finance the $99,998,918 commercial contract between NPPC and Power China Chengdu Engineering Corporation Limited. On November 11, 2018, a concession agreement was signed for the 45 MW Nam Phoun Hydropower Project. The purpose of the $128 million project is to construct a 45 MW hydroelectric power plant in Paklai (Paklay) District and Xayabuly Province. More specifically, it involves the construction of a head-race tunnel, a powerhouse and a substation, and related infrastructure facilities; the installation of turbines, generators, and transformers; and the laying of transmission lines. Upon completion, the plant is expected to generate annual energy output of 190 million KWh. Power China Chengdu Engineering Corporation Ltd was. the contractor responsible for implementation. Pre-construction activities, including a feasibility study in May 2018, did commence. However, it is unclear whether or when construction commenced. The project was scheduled for completion in 2024.

Additional details

1. This project is also known as the 45MW Nam Phoun Hydropower Station and the 45 MW Nanpu Hydropower Station Project. The Chinese project title is 南浦水电工程 or 南普水电站项目. The Laotian project title is ເຂື່ອນໄຟຟ້ານ້ຳພູນ. 2. AidData has identified the face value of the loan as $100 million based on this source (https://www.dropbox.com/s/nklella57vg868u/Banking%20and%20finance%20in%20Hong%20Kong%20_%20Law%20firm%20and%20lawyer%20rankings%20from%20The%20Legal%20500%20Asia%20Pacific%20guide.pdf?dl=0). 3. 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. 4. It is unclear why EDL is identified as the borrower rather than Nam Phoun Power Company Limited (NPPC). One possible explanation is that EDL on-lent the proceeds of the loan to Nam Phoun Power Company Limited (NPPC). However, this issue requires further investigation. 5. Some sources identify a 60MW Nam Phoun Hydropower Project rather than a 45MW Nam Phoun Hydropower Project. This issue merits further investigation. 6. The total cost of this independent power project (IPP) is $128 million and a $100 million loan was issued by ICBC. However, it is unclear how the remaining $28 million was financed. The project sponsors (investors) likely made $28 million of equity contributions. However, this issue requires further investigation. 7. NPPC is also known as Nam Phoun Power Co., Ltd.

Number of official sources

7

Number of total sources

12