The first water gushed forth from the Nam Gnuang dam in Borikhamxay province on Tuesday to provide an additional supply of water to the nearby Theun-Hinboun dam.
Mr Somsavat Lengsavad ( centre ) waves to photographers after pressing a button to release water from atop the Nam Gnuang dam.
The dam will store water for delivery to the Theun-Hinboun power plant some 30km away to ensure sustainable power generation in the dry season.
The dramatic ceremony at the dam in Thasala village, Khamkeuth district, was witnessed by Deputy Prime Minister Somsavat Lengsavad, energy developers, and officials from Borikhamxay and Khammuan provinces and the Ministry of Energy and Mines.
“The water released from the Nam Gnuang dam acts as a back-up to energy generation at the Theun-Hinboun dam,” said project assistant manager Mr Sisouvanh Souvannaphasy.
The Nam Gnuang dam, which took two years to build, is part of the Theun-Hinboun Power Company's hydropower expansion project.
The expansion project was initiated following financial restructuring in mid-2002 and because when the Nam Theun 2 dam became operational it reduced the volume of water available for the Theun-Hinboun dam.
The Theun-Hinboun dam, which has installed capacity of 220MW, is also located in Borikhamxay province, and an expansion is underway in adjacent Khammuan province. The expansion aims to increase the supply of energy both for local distribution and export. It will also increase generator capacity from 220MW to 500MW. Upon completion of the dam, 440MW will be sold to Thailand with the remaining 60MW sold to Electricite du Laos (EDL) for local supply.
The expansion project will start operating commercially in July with installed capacity of 220MW, and the Nam Gnuang dam is set to become fully operational in November with installed capacity of 60MW.
“So far the expansion project is over 98 percent complete,” EDL Managing Director Mr SisavathThiravong said.
The three main components of the project are the Nam Gnuang dam which is now 99.35 percent complete, the Theun-Hinboun expansion which is 93 percent complete, and the installation of transmission lines, which is now 96.14 percent complete.
Total costs are expected to hit about 6.2 trillion kip (US$720 million).
Sixty percent of the Theun-Hinboun Power Company is owned by government shareholders through EDL, while Nordic Hydro (Statkraft) and GMS Lao each hold a 20 percent stake.
“Once the power plant expansion is fully operational, its 500MW capacity will be able to generate about 3,000GWh a year and income of about US$150 million a year,” Mr Sisavath said.
The returns for Laos and for the project developers will be considerable. “Income is expected to amount to about 14 trillion kip (US$1,755 million) for 27 years during the project concession period, of which the dividend to EDL will be about US$1,201 million,” Mr Sisavath said.
“This figure will also include royalties of about US$229 million and about US$325 million payable to the Lao government in taxes.”
Established in 1995, the Theun-Hinboun Power Company was the first independent hydropower company in Laos and has operated successfully since 1998.