Who is Behind the Dam?

The Project’s Developers and Financiers

 

Xe Pian-Xe Namnoy is being developed under a build, operate and transfer (BOT) model. This means that a private-sector consortium will oversee the construction of the dam and operate it for 27 years, before transferring ownership to the Lao government. During the period that they control the dam, the consortium members will collect revenue and generate profit from it. Most hydropower projects built in Laos are developed under the BOT model.

 

The USD1.02 billion project is being funded through a combination of debt and equity financing. A 20-year, USD714 million syndicated loan from four Thai banks is covering 70% of the cost of the project’s construction. The lending syndicate is composed of four Thai banks: the commercial banks Krung Thai Bank, Ayudhya Bank and Thanachart Bank, along with the Export-Import Bank of Thailand, the government’s export credit agency.

 

The remaining 30%, or roughly USD306 million, is being provided by the project’s four developers, each of which has taken an equity stake in a Laos-registered joint venture. That joint venture, Xe Pian-Xe Namnoy Power Company Ltd., is building and will operate the dam. The four consortium members that hold equity stakes in the project are:

 

• SK Engineering & Construction, with a 26% stake, is a subsidiary of the large multinational Korean conglomerate SK Group. The consortium members selected SK Engineering & Construction to be the project’s engineering, procurement and construction (EPC) contractor, which means it is in charge of designing and building the dam, for which it will receive a substantial fee.

 

• Korea Western Electric Power Co., with a 25% stake, is a subsidiary of Korea’s publicly listed national electricity utility, Korea Electric Power Corporation. The consortium members selected Korea Western Electric Power to be the project’s operations and maintenance contractor, which means it is responsible for running the dam when it becomes operational.

 

• Ratchaburi Electricity Generating Holding Public Company, with a 25% stake, is a publicly traded Thai corporation. Ratchaburi is also the project’s construction supervisor, making it responsible for oversight of SK Engineering & Construction’s EPC work.

 

• Lao Holding State Enterprise, with a 24% stake, is fully owned by the Lao government. The company operates as a holding company through which the Lao government buys equity stakes in privately developed infrastructure projects. Lao State Holding Enterprise also acts as the dam’s administrative supervisor.