Malaysia firm to develop Laos’ 360-MW Don Sahong

Mega First Corp. Bhd. of Malaysia has signed a project development agreement with the government of Laos calling for Mega First to develop, own, and operate the Don Sahong hydroelectric project, expected to total 240 to 360 MW, on Laos’ Sahong River.

The project development agreement follows a feasibility study memorandum of understanding that the parties signed in March 2006 for the project, planned at Khone Falls in Champasak Province. (HNN 11/14/07) Mega First said the latest agreement, signed February 13, confirms findings of the feasibility and socio-economic studies that Don Sahong is technically and financially viable.

Mega First told the Kuala Lumpur Stock Exchange that the agreement provides 18 months in which the company has exclusive right to negotiate terms and conditions of project documents, including a concession agreement, shareholders’ agreement, power purchase agreements, an engineering-procurement-construction contract, an operation and maintenance agreement, and financial documents.

Mega First is to establish a special purpose company in Laos that will build, own, and operate Don Sahong under a 30-year concession, selling power mainly to Laos and possibly to Thailand, Vietnam, and Cambodia. At the end of the concession the project is to transfer to the Laotian government at no cost.

Don Sahong is to include a run-of-river dam, head pond, powerhouse, dedicated transmission line, and associated infrastructure near the Cambodia border, 150 kilometers south of Pakse, the capital of Champasak. Commercial operation is set between 2013 and 2015.

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