On February 25, the Japan International Cooperation Agency (JICA) signed a project finance loan agreement with Monsoon Wind Power Company of the Lao People’s Democratic Republic for a monsoon wind power generation project. The project is to construct and operate a 600MW wind power plant in Sekong and Attapeu provinces located in southeastern Laos, thereby increasing power supply from renewable energy sources and contributing to climate change mitigation by reducing greenhouse gas emissions in Vietnam, where the power will be sold. This is the first wind power generation project in Laos, and the power will be sold cross-border to the Electricity Generating Company of Vietnam (EVN), contributing to the promotion of green investment in the “Initiative for Overseas Investment and Loans to ASEAN” (announced in November 2019) and the “Asian Energy Transition Initiative” (announced in May 2021). This is a project.
The sponsors are Impact Electrons Siam Limited, BCPG Public Company Limited, STP&I Public Company Limited, ACEN Corporation, Mitsubishi Corporation, and SMP Consultation. The project will be co-financed by the Asian Development Bank (ADB), the Export-Import Bank of Thailand (Thai EXIM), Sumitomo Mitsui Banking Corporation (SMBC), and others.
This project is one of the key projects in the electricity development plan of the Vietnamese government, and is expected to contribute to alleviating the electricity supply-demand crunch and combating climate change in Vietnam. In its Nationally Determined Contribution (NDC), the Vietnamese government has set a target of reducing greenhouse gas emissions by 27% by 2030 compared to the level without climate change measures. The Eighth National Electricity Master Plan (PDP8), which is scheduled for national approval in the near future, targets an increase in wind and solar power generation capacity, and this project is expected to contribute to achieving this goal.
This project, which will provide cross-border electricity sales from Laos to Vietnam, will contribute to strengthening connectivity in the Mekong region. The Lao government will be able to earn foreign currency revenue from royalty income and other sources based on the concession contract, and the project is expected to promote local employment during construction and operation. Furthermore, the sponsor’s community development support program is expected to achieve electrification of the project site and improve people’s livelihoods.
This project will contribute to SDG Goal 7 (Make energy clean for all), Goal 13 (Take concrete action on climate change), and Goal 17 (Achieve the goals through partnership). This is a joint project with Mitsubishi Corporation and Sumitomo Mitsui Banking Corporation of Japan, and will also contribute to enhancing Japan’s presence in the international community on the occasion of the G7 Hiroshima Summit and the 50th anniversary of ASEAN-Japan Friendship and Cooperation.
JICA has been supporting the power sector in Laos and Vietnam in various aspects through financial and technical cooperation projects. Based on this support, JICA will support the power sector in Laos and Vietnam by encouraging renewable energy projects financed by the private sector through this project.
© Source JICA