8 December 2003
Wednesday July 23, 15:10 PM
BANGKOK, July 23 (Reuters)
Thai investors in a $1.1 billion dam scheme in neighbouring Laos said on Wednesday they had agreed to a three-month deadline to replace cornerstone investor Electricite de France [EDF.UL], which withdrew last week.
Laos had given the 1,070 megawatt Nam Theun 2 dam project three months to identify a new investor in order to meet a one-year ultimatum by its main electricity buyer, Thailand, to sign a power purchase agreement, they said.
A number of construction and utility firms from Asia and Europe were interested in replacing EdF, which had a 35 percent stake in the scheme, the investors said.
"Laotian Deputy Prime Minister Thongloun Sisoulith assured existing partners at a meeting on Tuesday the project would continue with current investors and we agreed to find a new partner in three months," a Thai official involved in the project told Reuters, referring to a meeting in Vientiane on Tuesday.
Another source from Thai contractor Italian-Thai Development Plc , which has a 15 percent stake of the project, said the remaining investors were prepared to buy EdF's stake but thought doing so would be unnecessary.
"Italian-Thai is strongly committed to the project," said the source, who declined to be identified. "If we have to raise the holdings of each investor in the project, we will. But I don't think we will have to."
Analysts say Laos, which owned a 25 percent stake in the dam, faces a tough challenge to find a new partner at a time when many U.S. and European utilities have sold their Asian assets in a bid to shore up weak balance sheets.
But Thailand's largest listed power producer, Ratchaburi Electricity Generating Holding Plc , said on Monday it was interested in a share of the project, while Electricity Generating PCL said it may raise its 25-percent stake in the dam.
The dam was expected to bring the impoverished Southeast Asian country an average export income of $80 million a year through the sale of most of its capacity to the state-owned Electricity Generating Authority of Thailand (EGAT).
EGAT is a major shareholder in EGCO and Ratchaburi.
EdF said last Thursday it had pulled out of the project, a day before the scheduled signing of a power purchase agreement in Vientiane, following advice from French government officials.
EdF's decision came a week after a diplomatic spat between Paris and Vientiane over a 15-year prison sentence Laos handed a French journalist before deporting him.
But Laos said the company's decision was not politically motivated and it urged former colonial ruler France to help find a new investor to take up EdF's stake.
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