First Project Financing for Hydro Power Plant Project in Lao People's Democratic Republic (Lao PDR)
Supporting Hydro Power Business of Japanese Companies

• Region: Asia
• Infrastructures
• Environment
• Overseas Investment Loans
• Project Finance

1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed a loan agreement^*1, in project financing^*2, totaling up to USD200 million (JBIC portion) with Nam Ngiep 1 Power Company Limited (NNP1), a Laotian company invested by The Kansai Electric Power Co., Inc., EGAT International Company Limited, a subsidiary of Electricity Generating Authority of Thailand (EGAT), and Lao Holding State Enterprise, a Laotian state-owned company, for financing the Nam Ngiep 1 Hydro Power Plant Project. The loan is the first project financing loan to Lao PDR for JBIC and cofinanced with private financial institutions, the Asian Development Bank and other financial institution bringing the total cofinancing amount equivalent to USD643 million.
    
2. The loan is intended to finance the construction and operation of the dam-type hydro power plant with the total capacity of 290 MW on the Nam Ngiep River in Bolikhamxay Province, Lao PDR, under the concession agreement^*3  between NNP1 and the Government of Lao PDR. Most of electricity produced is going to be sold to EGAT and also some to Electricite du Laos (a Laotian state-owned corporation), for 27 years. This is a cross border project within the ASEAN region where the economic growth is remarkable.
    
3. The loan supports financially the participation of Japanese companies in overseas infrastructure projects and will contribute to maintaining and strengthening the international competitiveness of Japanese industries, as well as contributing to the reduction of CO2 emissions through the promotion of a renewable energy source, the effective utilization of the abundant water resources of Lao PDR.
    
4. As Japan’s policy-based financial institution, JBIC will continue to support overseas deployment of infrastructure business of Japanese companies and contribute to maintaining and strengthening the international competitiveness of Japanese industries, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
    

Note

1. *1 The loan agreement was signed on August 15, 2014.
2. *2 Project finance is a financing scheme in which repayments are made solely from cash flows generated by the project and secured only on the project assets.
3. *3 The governments of Lao PDR and Thailand signed a memorandum of understanding (MOU) on the comprehensive power export.
4.