Lao PDR expects to begin construction 260-MW Don Sahong hydroelectric project

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Construction on the 260-MW Don Sahong hydroelectric project in Lao People’s Democratic Republic (PDR) is expected to begin before the end of 2015. According to an announcement from the National Assembly (parliament of Lao PDR), the facility is being built at the Mekong River near Khone Falls in Champasak Province.

Earlier this month, The Phnom Penh Post reported Daovong Phonekeo, director general of the Energy Policy and Planning Department at the Lao Ministry of Energy and Mines, released an email statement indicating the National Assembly approved a concession agreement for the Don Sahong Dam with Malaysian developer, Mega First Corp. Bhd.

In March, Mega First signed an agreement with state-owned utility Electricite du Laos (EDL) to regulate its participation in developing the hydropower project.

Per the agreement, Ground Roses Ltd., Silver Acreage Ltd. and EDL would hold 79%, 1% and 20% shares in the Don Sahong Power Company Ltd., respectively. The company will operate as a unit under Mega First.

Phonekeo added that a power purchase agreement between EDL and Mega First is awaiting signatures and once signed, construction would begin prior to year’s end.

The government thinks it can generate revenue from exporting power to neighboring countries. But, three neighboring countries in the lower Mekong – Thailand, Cambodia and Vietnam – have repeatedly called for a halt to construction. Their concerns revolve around fears “the project will dramatically alter the flow of the Mekong River and disrupt the migration of fish to the detriment of downstream communities in neighboring countries.”

Published reports indicate that in June, Lao PDR and neighboring countries used the Mekong River Commission (MRC), an inter-governmental consultation organization, to negotiate affected flow rates from the Mekong River prior to project’s construction.

The Don Sahong hydroelectric project is the second Lao PDR scheme to use MRC processes. Prior to constructing the 1,285-MW Xayaburi hydroelectric project, stakeholders also used MRC process for the scheme, which is located on the Lao PDR portion of the Mekong River.
 

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