The Asian Development Bank (ADB), the Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking, and Mizuho Bank, have announced their support for the project.
Japan Bank for International Cooperation and four Thai banks have also agreed to provide financing for the project.
ADB has signed financing agreements for an assistance package comprising a $50m direct loan, a Bt3.04bn (about $95m) baht-denominated loan, and a B loan of $72m.
ADB said the Lao PDR has a 20,000MW of hydropower potential from its river networks.
Further, it is claimed to be strategically located to become the ‘battery’ of the Greater Mekong Subregion.
Planned to be built on the Nam Ngiep River in the provinces of Xaysomboun and Bolikhamxay, the project features a main power station, a 67km² reservoir and a re-regulation power station.
Plans also include a 125km transmission line to link the main power station to the Nabong substation near the capital Vientiane.
The project, which is expected to go on line in 2019, will deliver power domestically and increase the Lao PDR’s household electrification rate.
ADB private sector operations department lead investment specialist Kurumi Fukaya said: "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."
The majority of the hydropower generated from Nam Ngiep 1 will be supplied to Thailand, which depends heavily on its dwindling natural gas reserves.
The use of hydropower is expected to reduce about 500,000 tons of carbon dioxide emissions per year in Thailand.
Image: The Lao PDR is reported to have a 20,000MW of hydropower potential from its river networks. Photo: Courtesy of markuso/FreeDigitalPhotos.net.
