A new tariff scheme introduced by the Electricity Generating Authority of Thailand is deterring financial investment to complete a hydro power project in Laos.

In September 1999, US-based K&M Engineering and Consulting Corporation undertook an assignment on behalf of the Asian Development Bank and Electricité du Laos to evaluate and recommend private sector financing approaches to complete the 60MW Nam Leuk project in Laos. Foreign costs of construction were initially funded through loans from the Asian Development Bank and the Organisation of Economic Co-operation Fund. Based on this assessment, the request for proposals was issued in October 1999 to eight prequalified bidders from Asia, Europe and the US. But no bids have been submitted and K&M is now having to investigate other sources of finance.

Construction of the Nam Leuk hydro power project, located 80km northeast of the capital city Vientiane, began in January 1997 and is 95% complete. The facility includes a 45m embankment dam, a power house with two vertical shaft turbines (each rated at 30MW), two 115kV transmission lines and two substations.

The facility will transmit the majority of its output to Thailand through a new transmission line and the existing substation at the 150MW Nam Ngum hydro power plant, which has been exporting to the Thai grid for several years.