The Asian Development Bank (ADB) has agreed US$217 million in funding for the 290MW Nam Ngiep 1 hydropower project in Lao PDR.

The Bank signed financing agreements earlier this month for an assistance package consisting of a $50 million direct loan, a Bt3.04 billion (equivalent of around $95 million) baht-denominated loan, and a B loan of $72 million. The B loan is funded by The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, and Mizuho Bank, Ltd. with ADB acting as lender of record.

The project will also be financed by Japan Bank for International Cooperation and four Thai banks.

Power generated from the Nam Ngiep 1 project will be delivered to neighboring Thailand, which relies heavily on its dwindling natural gas reserves. It will also be used to supply power domestically and raise Lao PDR’s household electrification rate.

“The project is a win-win for the Lao PDR and Thailand. It will generate revenues for the Lao PDR’s economic and social development, and provide Thailand with cost-efficient power," said Kurumi Fukaya, Lead Investment Specialist at ADB’s Private Sector Operations Department.
The project will be constructed by the Nam Ngiep 1 Power Company (NNP1PC), which is jointly owned by Kansai Electric Power of Japan, EGAT International of Thailand, and the Government of the Lao PDR.

The project will be constructed on the Nam Ngiep River in the provinces of Xaysomboun and Bolikhamxay in the Lao PDR. It consists of a main power station, a 67km2 reservoir, a re-regulation power station, and a 125km transmission line to connect the main power station to the Nabong substation near the capital Vientiane.

NNP1PC had engaged with communities affected by the project in the preparation of environmental and social safeguard plans. Based on these consultations, the plans were drafted to responsibly resettle the project affected people with livelihood restoration and social development support and to conserve biodiversity. The project has incorporated best international safeguard practices in mitigating impacts on the people and environment, the ADB said.

The project is expected to start operations in 2019.