China's giant power company, Sino Hydro, has entered into a joint investment with Laos' State Electricity Enterprise to build a fifth dam on the Nam Ngum river, aiming to produce electricity for sale to Thailand beginning in 2011.
Sino Hydro will hold an 85% stake in the project, which is estimated to cost about $200 million. The project will be funded through a $140 million-loan from the national Bank of China. The rest of the funding will come from the two investors - $54 million from Sino Hydro, and $6 million from Laos' Electricity Company.
The dam with a capacity of 165 megawatts will start producing electricity by 2011 for sale to Thailand's EGAT under the agreement that EGAT has signed with Laos to purchase some 5,000 megawatts of electricity from Laos by 2020.
Laos plans to build 29 hydro-power projects and have them running by the year 2020 so that it will have enough electricity to sell to Thailand the agreement. But Laos is likely to face stiff competition from China's Yunnan province, which is planning to build 14 hydro-power projects by 2020, also eying Thailand for its export destination.
Listen to our Laos Today report for more details.