Lao People's Democratic Republic: Na Bong-Udon Thani Power Transmission Project

Sovereign Project | 41689-012

Summary

The impact of the PPTA will be to promote the economic growth of the country and region by helping Lao PDR to develop its hydroelectric power resource in an environmentally and socially sustainable manner. It will also promote power trade in the GMS.

The outcome of the TA will be to formulate the proposed project?s financing program, using the MFF and preparing two loans that are structured and scheduled to suit the commercial operation schedule of the four hydropower developers. PPTA consultants will also prepare the legal documents for the subsequent operation of the common transmission facility provided through the proposed project and assist the Government in negotiating agreements with EGAT based on these documents

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Project Name Na Bong-Udon Thani Power Transmission Project
Project Number 41689-012
Country Lao People's Democratic Republic
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7026-LAO: Na Bong-Udon Thani Power Transmission Project
Japan Special Fund US$ 760,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming No gender elements
Description

The impact of the PPTA will be to promote the economic growth of the country and region by helping Lao PDR to develop its hydroelectric power resource in an environmentally and socially sustainable manner. It will also promote power trade in the GMS.

The outcome of the TA will be to formulate the proposed project?s financing program, using the MFF and preparing two loans that are structured and scheduled to suit the commercial operation schedule of the four hydropower developers. PPTA consultants will also prepare the legal documents for the subsequent operation of the common transmission facility provided through the proposed project and assist the Government in negotiating agreements with EGAT based on these documents

The PPTA will review the technical design of the Na Bong substation and the transmission line to assess their ability to transmit power reliably from all four hydropower plants by considering each power plant?s operating characteristics. PPTA consultants will undertake due diligence on the (i) cost estimates of the transmission line being built by the Nam Ngum 2 developer, including equipment and materials, and determine the cost of the section from Na Bong to the Thailand border; (ii) the implementation schedule for timely completion of the transmission line and substation to evacuate power from the associated hydropower projects; (iii) operation and maintenance (O&M) arrangements of EdL and EGAT for the transmission line and substation; and (iv) technical specifications of the substation and its compatibility with the EGAT and EdL power transmission systems. The PPTA will also review the bidding documents prepared by EGAT for the procurement of the substation on turnkey basis and assist EdL in the procurement process, including bid evaluation, in accordance with ADB?s Procurement Guidelines (2007, as amended from time to time).

Project Rationale and Linkage to Country/Regional Strategy

The Country Strategy and Program for Lao PDR has recognized the importance of developing its hydropower for export to generate foreign currency income through royalties, taxes, and dividends to the Government, which will in turn contribute to the country?s broader social and economic development. In addition, the Regional Country Strategy Program (2007?2009) for the Greater Mekong Subregion (GMS) focuses on (i) strengthening physical infrastructure for cross-border connectivity, and (ii) integrating national markets for promoting economic efficiency and private sector development. The GMS?s power market is moving toward effective regional cooperation, and Lao PDR is one of the pioneering countries in bilateral power trade in accordance with the GMS?s Inter-Governmental Agreement on Regional Power Trade. The governments of Lao PDR and Thailand signed a framework agreement to trade power that provides power sale arrangements of up to 5,000 MW by 2015.

The proposed project will consist of two components: (i) acquisition by Electricite du Laos (EdL) from the Nam Ngum 2 project developer of the 27 kilometer (km)-long 500 kilovolt (kV) transmission line from Na Bong substation to the Thailand border, and (ii) construction of the 500/230 kV Na Bong substation. The transmission line and substation will be used as a common transmission facility to evacuate power from the Nam Ngum 2, Nam Ngum 3, Nam Theun 1, and Nam Ngiep 1 hydropower projects, which have a total capacity of over 1,800 MW. The facility will be owned by EdL and will be operated and maintained by a proposed EGAT?EdL joint venture. Each hydropower project will construct a dedicated power transmission line to the Na Bong substation. The 500 kV transmission line is being financed and constructed by the Nam Ngum 2 developer by 2010 at 230 kV to evacuate power from the Nam Ngum 2 project to Thailand.

By mid-2012, the Na Bong substation is required to evacuate power from the Nam Ngum 3 and Nam Theun 1 hydropower projects. The transmission line from Na Bong to the Thailand border will be connected to the substation, and its operating voltage will be upgraded to 500 kV. The Nam Ngiep 1 hydropower project, scheduled to begin commercial operation in January 2014, will also be connected to the substation. As the substation and transmission line will be used as a common transmission facility to serve four hydropower projects, the Nam Ngum 2 project?s concession agreement provided an option to the Government of buying back the transmission line at cost. The Government intends to finance the substation?s construction and the transmission line?s acquisition through the proposed project.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Lao PDR
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The TA will require about 30 person-months of consulting services, including 20 person-months of domestic consultants. The consulting team will comprise transmission, financial, economics, lawyer, environmental and social development specialists.
Responsible ADB Officer Duy-Thanh Bui
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Ministry of Energy and MinesMr. Xaypaseuth Phomsouphaxaypaseuth@laopdr.comDepartment of Energy Promotion and Development
Timetable
Concept Clearance 24 Sep 2007
Fact Finding 29 Aug 2007 to 31 Aug 2007
MRM -
Approval 12 Dec 2007
Last Review Mission -
PDS Creation Date 17 Dec 2007
Last PDS Update 08 Aug 2011

TA 7026-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2007 30 Jan 2008 30 Jan 2008 31 Aug 2008 30 Jun 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
760,000.00 0.00 150,000.00 0.00 0.00 0.00 910,000.00 12 Dec 2007 754,582.81

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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