Japan offers loan for hydropower expansion

Published on June 23, 2013

The Japanese government, through the Japanese International Cooperation Agency (JICA) ,will provide a loan of more than 400 billion kip (5 billion yen) to the Lao government for the Nam Ngum 1 Hydropower Station expansion project.

An agreement in relation to the loan was signed at a ceremony yesterday in Vientiane by Deputy Minister of Finance, Mr Santiphab Phomvihane, and Chief Representative of JICA in Laos, Mr Koichi Takei.


Nam Ngum 1, located about 65km north of Vientiane, was the first hydropower project in Laos, with Japan providing construction support since 1960 and maintenance support since 2000.

The expansion project will aim to increase the station’s generation capacity to meet peak power demand in the capital region, adding an extra 40MW power generation unit at the site.

Funding for the project will be allocated to civil works, equipment procurement and consulting services, including construction monitoring and environmental and social considerations.

Boasting a holding capacity approximately twice that of Lake Inawashiro in Japan, the mammoth reservoir of the hydropower station is seven billion cubic metres in size, and has a stable inflow of water throughout the year.

It is expected the hydropower station will contribute to alleviating the power deficit in the capital even during the dry season.

Project construction will require work on the existing dam body to allow the expansion to proceed without stopping generation at existing units.

As the expansion will only use the current dam, environmental and social impacts are expected to be minimal.

When Lao Prime Minister Mr Thongsing Thammavong visited Japan in March 2012, he requested financial cooperation for the project.

The support from Japan is expected to contribute to an expanded domestic power supply in Laos that is stable, sustainable and efficient.

Referred to as the “battery of Asean,” Laos is furthering the development of power that uses the country’s ample potential water resources.

Of the total power produced in Laos, 80 percent is exported to Thailand and other neighbouring countries, a major source wealth for the country.

Given economic growth in Laos in recent years, however, domestic power demand has grown, with power consumption at least tripling over the past decade, and the amount of power imported from neighbouring countries has increased proportionately.

Furthermore, the vast majority of the power supply sourced in Laos is hydropower, so there is a large fluctuation in output between the wet and dry seasons .

The gap between power supply and demand is particularly large in the dry season during peak hours in the central region where the capital is located.

To ensure a stable supply of power to the capital region and future energy security, the development of power sources for domestic demand is a priority in Laos.

Source: Vientiane Times
June 22, 2013