Representatives of LienVietPostBank and Viet Lao Power signed a contract to finance the Xekaman 1 power plant in Laos on January 6. The Government will guarantee the funding to assure project progress. -- File Photo

HA NOI (Biz Hub) ─ The Government issued a letter of guarantee on August 5 for a loan worth over US$157 million from LienVietPostBank to finance a hydropower plant in Laos earlier this year.

The bank has announced this on its website, adding that the Government had assigned the Ministry of Finance to be responsible for the guarantee.

LienVietPostBank signed a contract with the Viet Lao Power Joint Stock Company in January to invest in Xekaman 1, a hydropower project worth $487.17 million, in Xanxay District, Attapeu Province.

The facility began construction in 2011 and is expected to generate 1.2 billion KWh of electricity per year when it comes into operation in 2016. It is part of an energy co-operation agreement between the two governments.

The guarantee helps assure the project's progress in accordance with the high-level commitments.

"The funding for Xekaman 1 is one of the greatest and most important credit contracts that we've ever had," said LienVietPostBank standing Vice Chairman Nguyen Duc Huong.

"It will open enormous opportunities for economic development for both nations," he added.

In May 2013, the bank signed a contract funding $51.5 million for the power company to build the Xekaman 3 at Sekong Province in Laos. ─ VNS