Nam Thuen II Hydropower Project Set Back Two Years by Phairath Khampha 11 September 2002 The Nam Thuen II hydro-power project in Laos would delay its operation by two years due mainly to adjustments to the power-purchase agreement (PPA) to be signed with the Thai electricity authority, the project's major shareholder said on September 9, 2002. According to Electricity Generating Co (EGCO), which holds a quarter of Nam Thuen II, the project would start to supply power to the Electricity Authority of Thailand (EGAT) by 2008 instead of 2006, as targeted earlier. The delay follows postponements to the PPA signing with EGAT. The deal had been put back from April to October, EGCO's senior vice president, Siwanan Na Nakorn, said. The conditions of the PPA had been adjusted, he said, with the number of power-generation hours to be reduced, resulting in a lower tariff for the developer from the project. The construction project would take six years to complete, including building the dam to provide the water for power generation, he added. "Also, the delay of the project has pushed its cost to hike to $1.2 billion from $900 million, as we targeted previously," he said. "part of this became apparent from information provided by Italian-Thai Development after its bid design submission phase with its engineering consultant from Canada." After the contract signing, developer would seek bank loans worth $800 million, half to be sought from local banks and half from foreign financial institutions. "We are negotiating with both the Export-Import Bank of Thailand and commercial banks while discussing the possibility for a risk-management guarantee from the World Bank," he said, adding that discussions could be finalised in 2002. The Lao government shares another 25 per cent of Nam Thuen II, while Electricity de France holds the largest portion (35 per cent). Thai contractor Italian Thai Development has the remaining 15 per cent. Delays are also expected because of political issues stemming from the United States wanting a say in how Laos develops socio-economically and it is using the IMF and the World Bank to force the issue by threatening to not provide partial-risk guarantee loans unless Laos' government kow-tows to American corporate demands.