In one of the biggest overseas hydroelectric deals involving a Chinese firm, Sinohydro signed a US$2 billion framework agreement with the Laotian government this week, the state firm's website said.
In October 2009, Sinohydro signed a US$2 billion agreement to build Coca-Codo-Sinclaire dam in Ecuador, then the biggest overseas hydroelectric project undertaken by a Chinese company.
Under the deal signed in Vientiane, Sinohydro will build seven plants along the 475-kilometre Nam Ou River, one of the longest tributaries of the Mekong River. 'This is the first time a Chinese company has gained the development rights to an entire river in Laos,' it said.
The seven dams will have a total installed capacity of 1,156 megawatts and generate 5 billion kilowatt-hours per year, Sinohydro said. The electricity will be sold to Laos' state electricity company.
'[The hydroelectric plants] will not only supply electricity to Laos but improve transport conditions along the Nam Ou River, spurring the development of tourism and industry, and driving the region's economic growth,' Sinohydro said.
Pavin Chachavalpongpun of the Institute of Southeast Asian Studies in Singapore said: 'Surely, this is a sign of China's ever-growing ... influence over Laos. This is a win-win relationship; China is able to pull Laos into its orbit, whereas Laos is able to use China to counterbalance Vietnam and Thailand.'