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         The Electricity Generating Authority of Thailand (EGAT) and the Électricité du Laos (EDL) signed a preliminary memorandum of understanding (MOU) for the new power purchase agreement (PPA) of Nam Ngum 1 and Say-sed to reflect the real cost of power generation according to the current power trading.

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         On December 14, 2018, General Prayut Chan-o-cha, Prime Minister of Thailand, and Mr. Thongloun Sisoulith, Prime Minister of Laos witnessed the signing of the MOU between Thailand and Laos. The preliminary MOU was signed by Mr. Viboon Rerksirathai, Governor of EGAT, and Mr. Boon-Oum Siwanpeng, Director of EDL for the new Nam Ngum 1 PPA and Say-sed PPA at the National Convention Centre in Vientiane, Laos.

         Mr. Viboon Rerksirathai, EGAT Governor revealed that this MOU was due to the contract expiration of the original Nam Ngum 1 PPA and Say-sed PPA. EDL suggested an electricity rate adjustment for both projects to reflect the real cost of power generation according to the current power trading.

         For the electricity rate which is being considered for approval from the policy department for the contract with EDL in 2019; electricity rate that EGAT will buy from EDL is during Peak 1.80 Baht/unit, and Off-Peak 1.53 Baht/unit, which is an average of around 1.63 Baht/unit; while electricity rate that EDL will buy from EGAT is during Peak 1.90 Baht/unit, and Off-Peak 1.63 Baht/unit, which is an average of around 1.73 Baht/unit. The electricity rate above will be used between EGAT and EDL until December 31, 2019.

         However, any electricity rate used during the entire course of the new PPA and the new PPA renewal must be between the lowest average rate (the current rate according to the contract) 1.33 Baht/unit, and the highest average rate (no more than the primary energy average rate bought from the IPP hydropower plant in Laos) 2.10 Baht/unit.

         The old Nam Ngum 1 PPA, B.E. 2517 - Present (added Nam Leuk Project and Nam Theun 2 Project), the electricity rate was set according to EGAT’s cost of power generation at the time which is during Peak 1.60 Baht/unit, and Off-Peak 1.20 Baht/unit. As for the old Say-sed PPA, B.E. 2548 - Present (added Say-sed 2 Project and Huai Lam Pan Yai Project), the electricity rate was set according to EGAT’s cost of power generation at the time which is during Peak 1.60 Baht/unit, and Off-Peak 1.20 Baht/unit.

         “Apart from setting an electricity rate to reflect the real cost of power generation according to the current power trading, the signing of the MOU for the new PPA is also to celebrate the “50 Years of Thai-Lao Stable Energy Relations.” The celebration commemorates an important event in history when His Majesty King Bhumibol Adulyadej, with King Sisavang Vatthana of Laos, presided over the opening ceremony of the first cross-border electricity interconnection between two countries in ASEAN on December 16, 1968. It was the beginning of a relationship for power development between the two countries on the bank of Mekong River. We will continue to strengthen the power security between Thailand and Laos to develop the ASEAN Power Grid and create a progressive and sustainable economy for the region,” said Mr. Viboon Rerksirathai.

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