CCB contributes $265 million to syndicated buyer’s credit loan for Phase 2 of Nam Ou Hydropower Project (Linked to Project ID#67486, ID#73303, & ID#73301)

On August 31, 2015, Powerchina Resources Ltd. and the Government of Laos signed a Franchise Agreement and Power Purchase Agreement for Phase 2 of the Nam Ou Hydropower Project in Beijing. Then, in September 2015, Powerchina Resources Ltd. created a wholly-owned subsidiary and special purpose vehicle called the Nam Ou Power Co., Ltd. in order to finance, develop, implement, and operate Phase 2 of the Nam Ou Hydropower Project on a build-operate-transfer (BOT) basis. The total cost of Phase 2 was $1.644 billion and it was financed with a mix of debt and equity. Then, on September 8, 2016, Nam Ou Power Co., Ltd. signed a $1.3 billion syndicated buyer’s credit loan agreement with China Development Bank, China Eximbank, and China Construction Bank. CDB contributed $770 million (captured in Project ID#67486) and China Eximbank and China Construction Bank jointly contributed $530 million (captured in Project ID#73301 and ID#98809). The loan carries a 20 year maturity. Nam Ou Power Co., Ltd. also purchased buyer’s credit insurance from Sinosure. Additionally, Powerchina Resources Ltd. made a $340 million equity contribution to the project (captured in Project ID#73303). The purpose of Phase 2 was to construct four hydropower stations — the 180MW Nam Ou 1 hydropower station, the 210MW Nam Ou 3 hydropower station, the 132MW Nam Ou 4 hydropower station, and 210MW Nam Ou 7 hydropower station — on the Nam Ou River in Luangprabang Province and Phongsaly Province. Upon completion, Nam Ou 1 will have a total reservoir capacity of 1.18 × 108 million cubic meters and generate 180MW from four sets of turbines and generators. Nam Ou 3 will have a total reservoir capacity of 218 million cubic meters and generate 210MW from three turbo-generator sets. Nam Ou 4 will have a total reservoir capacity of 142 million m3 and produce electricity from three turbo-generators with a total capacity of 132MW. Nam Ou 7 will include two turbo-generators sets with a total capacity of 210MW. The precise locational coordinates of Nam Ou 1 are 20.0883°N 102.265379°E. The precise locational coordinates of Nam Ou 3 are 20.695251°N 102.665404°E. The precise locational coordinates of Nam Ou 4 are 21.120153°N 102.494173°E. The precise locational coordinates of Nam Ou 7 are 21.120153°N 102.494173°E. PowerChina Kunming Engineering Corp Ltd is the EPC contractor responsible for implementation. A project commencement ceremony was held on April 28, 2016. Then, China Eximbank conducted an on-site, post-loan project inspection on August 31, 2019. On December 26, 2019, a ceremony to start the first power generation unit was held. The Nam Ou 3 and 4 hydropower stations successfully passed 72-hour trial operations on August 31, 2020 and September 7, 2020, respectively. Phase 2 was originally expected to reach completion in 2020. The 1st, 3rd, and 4th stages received certificates of completion from the Laos government on April 28, 2021. On September 15th, 2021, the first unit of the seventh-level hydropower station on the Nam Ou River in Laos has successfully entered into a 72-hour trial operation, marking that all power stations in the Nam Ou River basin have achieved the power generation target and will start the period of joint commissioning and transportation. The Nam Ou River Power Plant was completed on September 29, 2021 with a live ceremony to commemorate its completion. Under the terms of a concession agreement with the Government of Laos, Powerchina Resources Ltd. has agreed to transfer the Phase 2 project to the Government of Laos after 29 years of operation. CDB also financed Phase 1 of the Nam Ou Hydropower Project (see Project ID#63762).

Additional details

1. The project is also known as the Nam Oucasgade Phase II Hydropower Project, the Nam Ou Second Phase Hydroelectric Power Project, the 616MW Nam Ou 1, 3, 4, and 7 Cascade Project, and the Nam Ou Phase II Hydropower Project. 2. The Chinese project title is 南欧江二期项目. The Lao project title is ເຂື່ອນໄຟຟ້າ ນ້ຳອູ 1 and ເຂື່ອນໄຟຟ້າ ນ້ຳອູ 3 and ເຂື່ອນໄຟຟ້າ ນ້ຳອູ 4 and ເຂື່ອນໄຟຟ້າ ນ້ຳອູ 7. 3. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it identifies the face value of the CDB loan that supported this project as $1 biillion and the commitment year of the loan as 2011. However, official sources indicate the CDB issued a $660 million loan in 2016. 4. The China Eximbank 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. Some sources refer to Nam Ou Power Co., Ltd. as a wholly owned subsidiary of Powerchina Resources Ltd., while others claim that Nam Ou Power Co., Ltd. is jointly owned by Powerchina Resources Ltd. (990%) and EDL-Gen (10%). This issue merits further investigation. 6. Some sources refer to an 1156 MW Nam Ou Hydropower Station Project or an 1156 Nam Ou River Basin Hydropower Project — worth $2 billion to $2.7 billion — with seven separate cascade power stations and a total installed capacity of 1,272 MW or 1,156 MW. However, these are references to the larger project that comprises Phase I 540MW Nam Ou 2, 5, 6 Cascade Project (captured in Project ID#63762) and the Phase II 616MW Nam Ou 1, 3, 4, and 7 Cascade Project (captured in Project ID#67486). 7. The individual financial contributions of CCB and China Eximbank to the syndicated loan are unknown. For the time being, AidData assumes equal financial contributions ($265,000,000) by dividing their joint contribution ($530,000,000) by those two members' of the loan syndicate.

Number of official sources

20

Number of total sources

42