SK E&C are the lead EPC for KOWEPCO project

SK E&C and KOWEPCO signed a concession agreement for the Xe-Namnoy hydroelectric power project with the Laotian government constructing 410MW hydroelectric power plant as build-operate-transfer (BOT) form in the Mekong River area in Laos. The project groundbreaking in May 2013 and total construction cost will be KRW 750 billion.

SK E&C and Korea Western Power Corporation (KOWEPCO) signed a concession agreement to construct a USD 1 billion (KRW 1.1 trillion) Xe-Namnoy Hydroelectric Power Plant around Mekong River in Laos.

The Xe-Namnoy hydroelectric power project is to build three dams such as Houay Makchan Dam, Xe Pian Dam, and Xe-Namnoy Dam by blocking branches of Mekong River that go through the Bolaven Plateau, and to construct power plants and culverts that generate electricity using the gravitational force of fall and flowing water. The 410MW station capacity is equal to that of Korea`s largest hydroelectric power plant in the Choongjoo Dam.

SK E&C and KOWEPCO had established a consortium for this project in 2005 and Ratchaburi Electricity and Laos`s national company LHSE joined the consortium later. In 2010, they signed MOU with Electricity Generation Authority of Thailand for power purchase and signed the concession agreement with Laos`s government on October 19, 2012.

Through this concession agreement, SK E&C and KOWEPCO have been granted the concession to construct and operate Xe-Namnoy Hydroelectric Power Plant for the next 32 years. For this agreement, SK E&C and KOWEPCO signed a Power Purchase Agreement with Electricity Generation Authority of Thailand in November 2012 and they are planning to break ground in May 2013. The total construction cost is USD 680 million (KRW 750 billion) and the construction will be completed in 2018. Most of the produced electricity will be exported to Thailand.

Through this project, SK E&C which is in charge of plant design and procurement is supposed to export Korea`s excellent technologies and KOWEPCO will take charge of plant operation and maintenance for 27 years. Basing on accumulated know-how on plant operation, KOWEPCO will be able to create profit and make a contribution to the technology development of the developing country through hiring local people and their training in Laos.
In addition, it is expected that this project will contribute to the economic development of the two countries: Thailand will be provided with stable and cheap electricity and the Laotian government will earn KRW 33 billion as income tax and royalty every year.

The significance of this project lies in that it is the first overseas project executed by both private sector and public sector as a form of BOT. At the same time, through this project, the two sectors were able to establish a strong bridgehead for the business in the Mekong River area and Laos which are showing significant signs of economic development.