ADB has agreed to a US$20M loan to the 1070MW Nam Theun 2 project being built on the Mekong tributary. The project will see a 39m high dam built northwest of the Nakai Plateau to impound the Nam Theun river, giving a head drop of 350m from the reservoir to powe rhouse.

Nam Theun 2 is to export 5354GWh of electricity across the boarder to Thailand and the Lao PDR state is to earn income from taxes, royalties and dividends. A proportion of the plant’s output, up to 300GWh, will be reserved for domestic consumption.

The project is being developed by Nam Theun 2 Power Co, which has a 31-year concession of which the operating period is 25 years.

The ADB is also considering a loan application for another export-oriented hydro project – the 750MW West Seti scheme in Nepal, which is to supply electricity across the Himalayan border to India. A Memorandum of Understanding (MoU) for the export of electricity has been in force since 2003 with Power Trading Corp of India.

The project is attractive as a storage scheme to competitively help meet peak load needs of the electricity grid in northern India. The scheme is being developed by the Snowy Mountain Energy Corporation-West Seti Hydroelectric Corp Ltd.