2023.04.10
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 the Monsoon Wind Power Project. This project involves the construction and operation of a 600-MW wind power plant in Sekong and Attapeu provinces located in southeastern Laos, thereby increasing the electricity supply from renewable energy sources and contributing to climate change countermeasures by reducing greenhouse gas emissions in Vietnam, where the power will be sold.
This is the first wind power project in Laos and will sell electricity cross-border to Vietnam Electricity (EVN), contributing to the promotion of green investment in the "Initiative on Overseas loan and Investment for ASEAN" (announced in November 2019) and the "Asia Energy Transition Initiative" (announced in May 2021).
The project is sponsored by 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.
One of the key projects in the electricity development plan of the Vietnamese government, it 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 measures against climate change. The National Electricity Master Plan VIII (PDP8), which is scheduled for national approval in the near future, targets an increase in the capacity of wind and solar power generation, and this project is expected to contribute to achieving this goal.
Through the provision of cross-border electricity sales from Laos to Vietnam, this project will contribute to the strengthening of connectivity in the Mekong region. The Lao government will be able to earn foreign currency income from royalty income and other sources based on the concession contract, and the project is expected to promote local employment during the construction and operation period. 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 also contribute to SDGs (Sustainable Development Goals) Goals 7 (Affordable and clean energy), 13 (Climate action), and 17 (Partnerships for the goals). It will be carried out with the cooperation of Mitsubishi Corporation and SMBC,and will enhance 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 ways through financial and technical cooperation projects. Based on this support, and through this project, JICA will help develop the power sector in Laos and Vietnam by encouraging further renewable energy projects funded by the private sector.
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