Norway to begin hydropower projects in Laos

The Lao government granted permission this week for a Norwegian company to initiate two hydropower projects in the country.

The Deputy Minister of Planning and Investment, Mr Thongmy Phomvisay, and the Managing Director of the Norpower Co Ltd, Mr Over Chr Bugge, signed a Memorandum of Understanding in Vientiane on Monday that will allow the company to conduct economic, social and environmental impact studies of the Nam Nga River in Luangprabang province, and the Xelanong River in Savanakhet province, to examine their suitability for potential hydroelectric generation.

According to the memorandum, Norpower is expected to spend two years conducting a feasibility study for the two projects before submitting the results to the government for consideration.

An official from the ministry, who asked not to be named, said that Norpower had a lot of experience in such projects, adding that if the company can demonstrate a profit as well as limiting the socio-environmental impacts, the government would be happy to allow the company to build dams on these rivers.

He said the company expected to spend 960 million kip (US$ 1 million) on surveys.

Speaking after the company, Mr Bugge said his company had made an early study on the proposed capacity of the power plants, which showed that both would generate only 8 megawatts each.

“It is a small project but still profitable, otherwise we would not be making the investment “, he told Vientiane times.

He explained that more developers were interested in small hydropower schemes; a small-scale project has some advantages compared to larger ones, such as a less significant social and environment impact, which can ensure the co-existence of nature and humans and more sustainable development.

Mr Bugge said his company was not investing in mega-projects like the NamTheun 2, which has a production capacity of 1,000 megawatts.

He said Laos had significant hydropower potential due to its unique terrain and abundance of rivers, so it was logical for company to establish a branch here. He added that Norway had the requisite experience and technology to develop hydropower.

“The increasing power demands in the region power demands in the region from Thailand and Vietnam will undoubtedly make investment in the hydropower sector profitable," he said.

Two months ago, the company also signed development agreements with the government to develop a hydropower plant on the Nam Sim River , in Huaphan province.