EXECUTIVE SUMMARY

This Phase II Report presents the results of the Phase I and Phase II studies for “Houay LamphanGnai Hydropower Project Technical Economic Feasibility Study (the Study)” from May 26, 2008 toNovember 30, 2009.

The Houay Lamphan Gnai (HLG) Hydropower Project (the Project) is planned to be implemented ona stretch of the Houay Lamphan Gnai River found on the Bolaven Plateau in Champassak Province insouthern Laos. The Houay Lamphan River, one of the tributaries of the Sekong River, flows to thenorthwest on the tableland of the Bolaven Plateau and makes a U-turn after dropping from thenorthern rim of the tableland. The Project is designed to utilize a vertical drop of some 600 mbetween the top and bottom of the escarpment with a relatively short waterway to the proposedpowerhouse site. The damsite is located on the Plateau in Champassak Province, while thepowerhouse site is in Sekong Province below the rim of the tableland. An installed capacity of over80 MW could be developed with the generated power supplied to Champassak, Sekong, Attapeu andSaravane Provinces via the Southern Power Grid, one of the four independent national power grids.

According to the “Electricity Statistics Yearbook 2006 Lao PDR, Department of Electricity (DOE)”,54% of Lao households had access to electricity in 2006. The Government has set a target ratio ofelectrification of 70% by the year, 2010 and 90% by 2020. The Yearbook also gives the presentelectrification ratio in the provinces of the southern region as follows: Champassak: 60%, Sekong:45%, Attapeu: 19% and Saravane: 45%. Although the electrification ratio in the region is almost thesame as the average for the wholecountry, the power supply situation atpresent is rather uncertain. The mainpower sources of the Southern PowerGrid are two small hydropowerstations: Xeset (45 MW) and Selabam(5 MW). Since these hydropowerstations are the run-of-river type,power generation does not reach its fullcapacity in the dry season due to lowriver flow. In the case of the Xesethydropower station, the stationgenerates power of approximately 35MW at off-peak times and 40 MW atnight peak times on average in therainy season. In the dry season, 2 or 3MW of power can be generated at offpeak times and 12 to 13 MW at nightpeak times.

(a) Rainy season (b) Dry season(Source; Xeset in June 2008)

Fig. 2 Daily Power Generation for Xeset

As a result, in the dry season, the southern region relies on the import of electricity from EGAT inThailand through the Bang Yo substation. On the contrary, in the wet season, both power stationsgenerate more energy than is demanded by the Southern Grid and surplus power can be exported toThailand. However, the power purchase agreement with EGAT stipulates a tariff for power importhigher than that for export. Thus EDL is at a disadvantage in terms of revenue in this power exchange.The Lao Government, therefore, has planned to reduce power import by the development of small andlarge scale hydropower resources for domestic use and for export.

With the abovementioned situation in the background, the Houay Lamphan Gnai Hydropower Projecthas been planned to meet the following objectives;

1) To increase the electrification ratio in the southern region,2) To reduce power import from neighboring countries in the dry season,3) To increase power export to neighboring countries in the wet season.

In line with the power development policy, a detailed Feasibility Study (the Study) of the HouayLamphan Gnai Hydropower Project has been conducted with the assistance of the World Bank, withreference to the Pre-Feasibility Study of 2006.

The main features of the Project is presented in Table 1.

Table 1 Main Features of the Houay Lamphan Gnai Hydropower Project

Items Main FeaturesHydrology Catchment area main river 144 km

diversiontributaries

93 km2

(total) 237 km2

Reservoir inflow main river 7.5 m3/s

tributariesdiversion

3.9 m3/s

(total) 11.4 m3/s

Output Installed capacity 84.8 MW

Annual generated energy 452 GWh/y-0.48%Shaft 2.80m I.D.Steel Lining

1.55m I.D.Concrete Lining 2.80m

I.D.Steel Lining 1.85m

I.D.L=3,590.99Powerho

useSwitchyard

Tailrace4.2M5.9M1M3MCo

mpletion

7.3M5.9M6.6M6.7M4M3M1.0M1M1

Mcompletion : 50.6M

Average plan factor 61%

Peak operation hours 13 hours

Reservoir High water level (HWL) 820.00 m

Rated water level (RWL) 812.00 m

Low water level (LWL) 795.00 m

Max storage volume (at HWL) 141 mil m3

Active storage volume 122 mil m3

Design sedimentation volume (50 years) 4.5 mil m3

Reservoir area (HWL) 6.8 km2

Dam Type RCC dam Earthfill dam

Max dam height 79 m 41 m

Dam length 565 m 65 m

Dam crest elevation (EL.) 824.00 m 824.00 m

Estimated dam base rock level 745.00 m 783.00 m

Spillway Design discharge (1,000 year) 795 m

Waterway(Total 7,947.05 m long)

Headrace tunnel Inner diameter (ID2.8) 2,830.83 m

Surge tank tunnel (ID2.8)40 m

* Basic project cost includes the costs of construction by EPC contractor (163.2 M), Owner's preparatoryworks (1.6 M), environmental impact mitigation measures (25.5 M), and project management (4.8 M).

1. SCOPE OF THE STUDY

The feasibility study for the Houay Lamphan Gnai Hydropower Project consists of the twophases: Phase I: Selection of Hydropower Scheme and Phase II, a detailed Feasibility Study (ofthe selected Hydropower Scheme in Phase I).The scope of the works of each phase specified in the Contract is summarized below.

< Phase I >(1) Macro-level investigations,(2) Micro-level investigations,(3) Comparative assessments of capacity (kW) and energy (kWh),(4) Comparative capital costs of each alternative,(5) Comparative present net worth of benefit from Alternative A and Alternative B.

< Phase II >(6) Assessment of Existing Documentation of Houay Lamphan Gnai HPP,(7) Selection of Damsite, Dam Type and Height,(8) Selection of Powerhouse Site,(9) Topographical Surveys and Preparation of Maps,(10) Geological, Geophysical and Geotechnical Investigations,(11) Seismic Study,(12) Construction Material Survey,(13) Meteorological and Hydrological Studies,(14) Hydraulic Studies,(15) Reservoir Operation Simulation Studies,(16) Power and Energy Analysis,(17) Infrastructure,(18) Transmission System Associated with Houay Lamphan Gnai HPP,(19) Cost Estimate,(20) Implementation Schedule,(21) Economic Analysis,(22) Financial Analysis,(23) Engineering Design,(24) Dam Safety Plans,(25) Drawings,(26) Quantity Estimate,(27) Procurement Planning,(28) Technical Specifications,(29) Feasibility Study Report.

2. TOPOGRAPHY AND GEOLOGY

The Project is located on the northeast end of the Bolaven Plateau. The top of the plateau withsome undulations is almost flat. It has an elevation of 1,300 m. The side slope of the plateaumakes an escarpment stretching over 100 km at 1,000m in height.

The Houay Lamphan Gnai River flows down to the northwest along the v-shaped /u-shapedvalley on the plateau. After falling from the northwest end of the plateau, the river changesdirection and flows toward the southeast with a u-shaped meander until it runs into the SekongRiver.The continuous escarpment is composed of thick and hard sandstone which looks like the caprock of the plateau.

The damsite is located in the cretaceous formation (Mz2), hereinafter called the upperformation, as shown in Fig. 2-1 and Fig. 2-2. The upper formation consists of sandstone andmudstone, which makes the holocline structure with N25E/15NW, and where in general eachlayer uniformly dips northeastward.

The penstock tunnel and the powerhouse is laid out in the Triassic- Jurassic formation (Mz1),hereinafter called the lower formation. The lower formation also consists of sandstone andmudstone, which makes the holocline structure with N40W/30SW.

An unconformity plane may exist as a boundary between both formations. The direction of theunconformity plane is not known, but it is assumed that the plane is laid horizontally as shownin Fig. 2-2.

The basalt rock (vPg) overlies both formations.

Fig. 2-1 Topographical and Geological Features of the Project Area (Plan)

Fig. 2-2 Topographical and Geological Feature in Project Area (Profile)(This profile is schematic so as to understand the general trend of the geological structures.)

DamThe right abutment of the dam will be put on CL class rock 10m in depth. As CM and CH class rock

widely forms the foundation of the right abutment below CL class rock, there are no problemson the right bank in bearing capacity. The ground water level on the right bank is relativelyhigh. Accordingly, the high ground water will resist the pressure of the reservoir water andprevent leakage through the rock.

There are continuous outcrops along the riverbed in the upstream area of the damsite. The two (2)joint systems of N85E/90 and N20E/90 are observed in this area. The river water disappears inthe dry season and sinks into the sandstone layer through these open joints. The layer underthe sandstone is mudstone which is generally good and better than CM class rock. Thismudstone is preferable for the dam foundation. The mudstone at the dam axis has enough highbearing capacity for a 70m class high dam according to the laboratory tests.

Fig. 2-3 Dam Geological Profile

The left abutment of the dam will be put on mainly CM class basalt rock by the deep excavation ofthe clayey sediment. The basalt is generally hard and well jointed, which does not posesubstantial problems concerning the dam foundation. The ground water level on the left bankis fortunately higher than the upper limit of the basalt rock. Accordingly, the high ground waterwill resist the pressure of the reservoir water and prevent leakage through the rocks. Moreover,leakage through the sediment is also hardly expected because the sediment is composed ofimpermeable clayey materials.

Waterway RouteThe rocks below about 15m in depth from the ground surface is judged to be better than CM class

rock with alternation of sandstone and mudstone. There seems to be no major faults nor deepweathered zones. The geological condition of the area surrounding the surge tank and thevertical shaft is also generally fine. However, as it will encounter the old weathered zone abovethe unconformity plane where the condition of the rock is more permeable than the surroundingrocks, there would be water leakage through the weathered zone along the unconformity plane.

PowerhouseThe foundation rock of the powerhouse could be found in the ground 5.7m from the surface

according to the PH-1 drilling. No problem for excavation behind the powerhouse is expectedbecause the weathered zone is judged to be generally shallow.

Quarry and Borrow SiteThe quarry site selected is in the mountainous area 1 km north and downstream from the damsite.

This is considered to be the nearest quarry site to this damsite. Basalt lava is found from thedamsite to the quarry site about 700m in width and about 30m in thickness according to the twodrilling holes (BH-B1, BH-B2) and outcrop data. There are pores in the basalt rock made inthe cooling process after lava flows. However, CH class rock will be available for needed rockmaterial as it is generally very hard judging from the palpation done by hammer. Moreover,fundamental factors such as the strength, the absorption and the specific gravity metrequirements for concrete aggregates according to the laboratory tests.

The borrow site will be selected in the same mountainous area as the quarry site. An overburden ofstrongly weathered rocks is deeply and widely distributed in the shallow part of the quarry site.The strongly weathered rocks are composed of mainly silty materials including some clayeycomponents and some fragments of soft rocks. The overburden in the quarry site is consideredto be suitable for earth fill materials judging from technical experience by hand feeling in thefield and observation of the drilling cores.

3. HYDROLOGY

Low FlowWater level at the just upstream site of the dam was observed from November 2005 to April2007 by an automatic water level gauge and a manual type staff gauge in the pre-feasibilitystudy stage. In the Study, water level at the same site has been observed from July 2008 toApril 2009. The estimate of river discharge from the water level at the dam site wasaccomplished by using the rating curve, which had been drawon this river discharge, a tankmodel was established. By this run off simulation model, long term run-off of the HouayLamphan Gnai River was estimated for the period from 1991 to 2007. Basin rainfall isestimated by simple averaged rainfall observed at Thateng, at Nikhom 34 and at Sekong.Flood 3/s)

Tcalibraterainfall at Thateng. Probable rainfall is derived from daily rainfall data from 1995 to 2007 atThateng. Missing data are compensated fo

Nikhom 34 and Sekong by linear correlation with the daily rainfall observed at Thateng.Probable rainfall is projected based on the annual maximum daily rainfall at Thateng from 1960to 2007, together with other probable rainfall values by using Log-Person Type III distribution.Probable discharge is calculated by the probable hyetograph obtained with the flood run-offmodel: the storage function model. Sediment Yield Referring to the data used in the otherstudPDR, tmapplied to the Pr

416 ton/km2

/year by assuming a void ratio of 0.5 and a specific gravity of soil material of 2.65.This value is approximately twice that of the other sediment yield values used for planninghydropower projects near the Houay Lamphan Hydropower Project Site. ENVIRONMENT InPhase I study, Alternative A (Dam

environmental cThe EIA has included the preparation of an Environmental Management Plan (EMP) which

programs mitigation activities and responsibilities, and a Watershed Management Plan (WMP)to ensure the sustainable yield of g

In parallel, a Social Impact Assessment (SIA) and Resettlement Plan have been prepared. Theresettlement plan incorporates an ethnic minorities peoples’ plan (since all affected persons arefrom ethnic minorities) and is thus a Resettlement and Ethnic Minority Peoples

5 96 10

135

25

50

200 265

00

345

00445

000

795MF,060

4Impacts in the Design Phase Flora and fauna

The areas of forest impacted bysurrounding districhabitat loss for local fauna, since the majority of affected forest is close to settlement and farming

areas and therefore of lower quality than the more remote, untouched forests. Loss of land andvegetation cover from temporary camps and permanent construction facilities is not significant.Socio-Economic Impacts Socio-economic impacts will be a major consequence of thedevelopment and will occur during both the desig

three sections of access roadshouseholds. The area originally proposed to receive the resettlers, adjoining the village of Ban

Nongkan was small (363 ha), and currently an extended area is being investigated and assessedfor suitability by District agency staff. The investigation area is centred upon the originalresettlement area.

4.2 Construction Impacts Construction Activity Impacts

mitigation measures develoAdditionally, in the constructiochanges as the dam function begins to be operational. Hydrological Impacts Hydrological impacts,

with potential for induced impacts on aquatic ecosystems and aquatic resource livelihoods, willoccur during construction

for reservoir filling. At the cthese tributaries, flow in the immediate downstream reach will depend on direct runoff and riparian

releases from the Project. Operational Impacts

The creation of a large wateto the commonality of fish species inaquatic organisms from upstream waters. The dam will cause a reduction in stream flow in the

Houay Lamphan Gnai below the dam site, extending initially to the confluence with the HouayKapouay 12.5 km downstream. Reductions in flow will be significant but th

this reach and impacts will be mitigated by a riparian release of 1.0 m3

/s in all seasons from theHouay Mout tributary.

Water Quality After impoundment, flomanagement (85% reoxygen demand levels in the reservoir will be low. Additionally, any water with depleted oxygen

levels drawn from the hypolimnion will be re-aerated in the turbulence of the Pelton turbines’tailrace. Greenhouse Gas Carbon dioxide em

from anaerobic decompositionwarming potential. Biomass removal to control oxygen demand will also mitigate CH

4emissions.

Biomass management adjacent to the drawdown zone will control yearly colonization of thedrawdown area and reduce this long-term CH

4generating source. Watershed Management The

EIA includes a comprehensive Watershed Management Plan, with alivelihood development inecosystem degradation in the project’s catchment which could reduce flora and fauna habitats will be

controlled through the long term management of District Protected Forests in the watershed.

4.4 Environmental and Social Safeguard Costs

The main environmental and social safeguard costs are those associated with resettlement,compensation and livelihood development. These are summarised as follows:

5.

ALTERNATIVE STUDY

The optimum layout of the Project was selected among the several layouts including a openpenstock option, a underground powerhouse option, and a rockfill type dam.

Project LayoutAs shown in Table 4-1, the following alternative project layouts were considered including theselection of dam type.

- Open penstock option: the alternative brought up in Phase I- Underground powerhouse option: two locations in an underground powerhouse cavern- Intake option: shift upstream to shorten the length of the headrace tunnel- Dam type: RCC concrete gravity type or rockfill type

For this comparative study, construction costs were estimated with reference to the Phase Ilevel.As a result, the project layout drawn in Table 4-1 called the "Final Layout in Phase II" isselected for the feasibility study grade design in Phase II.

Dam TypeThe foundation of the dam on the left bank is basalt. The basalt is spread horizontally at aroundEL. 785 and stretches to the small col in the west where interbedded sandstone and mudstoneare the main geologic formation. There is unconformity between the interbedded sandstone andmudstone and the basalt, which continues to 600 m from the river. This interbedded sandstoneand mudstone would normally be the foundation for the left wing of a dam. However, thelength of the dam runs to around 800 m and a huge volume of excavation will be necessary, ifthe interbedded sandstone and mudstone are the foundation. Therefore, the idea of "backfill" isintroduced as shown in Fig. 5-1.

ItemsHydrology Catchment area main river

diversiontributaries

93 km

(total) 237 km

Reservoir inflow main river

tributaries

3.9 m3/s

This is the idea that the excavated space on the leftbank mountain ridge at the backside of a massiveconcrete structure is filled with earth materials like abackfill for a retaining wall. The massive concretestructure on the basalt is a dam body like in the caseof a concrete gravity type dam. In the case of arockfill type dam, the structure would be utilized asa spillway. The material for the earth fill should bewell controlled and compacted to obtain necessaryimpermeability like an earth fill type dam. The earthfill is planned on the mountain side where theelevation is higher than the dam crest elevation inorder to secure bearing capacity of the soilfoundation. That is to say that a part of the mountainis replaced with the earth fill. Therefore, settlement of a soil foundation will also be avoidable.Two types of dam are considered for the HLG Project, namely a roller compacted concrete(RCC) gravity type and a rockfill with core type dam. Each type of dam has been given apreliminary design for cost comparison as seen in Fig. 5-2 and 5-3 and cost are tabulated inTable 5-2.According to the cost comparison shown in Table 5-2, there is a clear gap because of thespillway cost in case of the rockfill type dam and the RCC type dam was selected.

Table 5-2 Cost Comparison

Items Main FeaturesHydrology Catchment area main river 144 km

diversiontributaries

93 km2

(total) 237 km2

Reservoir inflow main river 7.5 m3/s

tributariesdiversion

3.9 m3/s

6. PROJECT SCALE OPTIMIZATION STUDY

The project scale in respect of the maximum turbine discharge, high water level (HWL),low water level (LWL), and rated water level (RWL) was studied using a reservoirsimulation program and a cost estimate program. Through the optimization study inPhase I and Phase II, the optimum size of the Houay Lamphan Gnai Hydropower Project(the HLG Project) is concluded as follows;

Installed capacity: 84.8 MWAnnual production energy: 452 GWh

Maximum Turbine Discharge (Qmax): 18.5 m3

/sHigh Water Level (HWL): EL. 820.00 mRated Water Level (RWL): EL. 812.00 mLow Water Level (LWL): EL. 795.00 mPelton Turbine Center Elevation: EL. 205.00 mPeak Duration Time: 13 hoursNumber of Units: 2 units

Power Development PlanFor the project optimization, the role of the HLG Project was examined on the basis ofthe EDL’s Power Development Plan (PDP 2007-16) and it was concluded that the HLGProject should be developed as a middle peak supply power station for local demand for a13-hour peak time from 9:00 to 22:00.Fig.6-1 (a) shows that day time demand is satisfied by the HLG Project and peak timedemand by Xeset 2 in addition to the base power supply by Xeset 1, Selabam, Houay Hoand Xekaman 3. The figure shows the role of each power station clearly. This will be atypical pattern of power supply after completion of the HLG Project. However, Fig.6-1(b) suggests that another hydropower power station having a similar function as the HLGProject, namely a hydropower station which has a reservoir for seasonal regulationoperation, will be needed in the Southern Grid soon after the HLG Project. A dailydemand curve in 2020 is converted from that recorded on May 5, 2008 at the Bang YoSubstation as a typical daily demand in the Southern Grid.

(a) One Day in Rainy Season (b) One Day inDay in Dry Season

Fig. 6-1 Daily Peak Demand and Power Supply Balance in 2020

Project OptimizationGenerally, the benefit of a hydropower plant is found by comparison with the cost of analternative thermal plant which provides the same service as the hydropower plant inquestion. The alternative power plant should be the least cost option among severalpossible thermal plants. Moreover, the alternative plant should be one that canrealistically be constructed in the region. However, power import is the only realisticalternative to the HLG Project that can serve the consumers in the Southern Grid. For thisreason, the tariff for power import from EGAT is applied as the unit cost of alternativesto calculate benefit.Regarding cost, in Phase I, as construction cost for a large number of computation casesshould have been estimated, the cost estimate program was introduced, which wasdeveloped on the basis of empirical formulae derivedfrom the past cost record. In Phase II, the cost wasestimated again using revised unit prices. In Phase II,hydrological data were also revised and reservoirsimulation study was carried out again for calculationof power energy.Fig. 6-2 is the result of the optimum project scalestudied in Phase II.

Power and Energy Generated by Optimum ScaleProjectFig. 6-3 (a) shows that the reservoir is well utilized inmaximization of energy production. The reservoirwater level fluctuates annually between HWL to LWL.According to Fig. 6-3 (b), it can be said that the Projectgenerates power ranging from 80 MW to 84 MW in thepeak time over the period. Fig. 6-3 (c) shows the same generated power but arranged inorder of magnitude. As shown in this figure, the Project can generate more than 80 MWof power during peak time over 75 % of the time over a period of the simulation: 17years. The power guaranteed in peak time 95% of the time for the period i.e. “peak firmcapacity” is 35.5 MW, which can be read in the mean curve (bold red line) of Fig. 6-3 (c).According to Fig. 6-3 (d), 280 GWh of energy is generated in the wet season and 172GWh in the dry season out of the annual production of energy of 452 GWh. These areequivalent to approximately 60 % in the wet season and 40 % in the dry season of theannual production of energy. Specifically, the HLG Project can generate power even indry season and this is the most important role of the Project in the Southern Grid.

Fig. 6-3 Results of Reservoir Simulation

7. PROJECT COMPONENT

The main project component consists of the RCC dam, intake headrace, surge tank,vertical shaft, lower pressure tunnel, powerhouse and switchyard, electro- mechanicalequipment, transmission line and substation, and tributaries diversion. The main featuresare presented in Table 1. The structures and the equipment were optimized anddesigned from hydrological, hydraulic, structural, and electrical viewpoints in accordancewith the Lao Electric Power Technical Standards (LEPTS) and other internationaltechnical standards and guidelines.

DamThe dam consists of the RCC concrete dam with 79 m height and 565 m length and theearthfill dam with 41 m height and 65 m length as shown in Fig. 7-1. The RCC dam willbe founded on the CM class mudstones on the right bank and riverbed and the CM classbasalt rocks on the left bank. The earth fill is planned on the mountain side where theelevation is higher than the dam crest elevation in order to secure bearing capacity of thesoil foundation. That is to say that a part of the mountain is replaced with the earth fill.Therefore, settlement of a soil foundation will also be avoidable. Analyses in respect ofoverturning, sliding and shearing capacity of the foundation were conducted and the damswere confirmed to be safety.

Compared to the scale of the dam with 79 m high and 630 m of the total crest length, thedesign flood is rather small. This is a merit of the Project and good condition for planningan un-gated spillway, which saves the cost of gates, auxiliary equipment and power aslong as planned HWL is secured. The spillway size was optimized by the flood routinestudy.The inspection gallery for dam construction and maintenance and the bottom outlet foremergency are planned in the dam body.

Fig. 7-1 Dam Plan and Profile

IntakeThe intake is located approximately 4 km upstream of the dam. The intakes are designed

to draw the maximum turbine discharge of 18.5 m3

/sec to the tunnel. A side-type intakehaving the vertical gate tower structure was selected based on operational and functionalrequirement for the gate taking geological and topographic conditions into account.Intake crest elevation was designed to avoid inflow of sediment and vortex formation.Stability analysis was conducted to confirm the stability in respect of overturning, slidingand bearing capacity of the foundation. As for the gate section, structural analysis wasconducted.

Headrace tunnelThe headrace tunnel of 2,831 m length is planned at the minimum length from the intaketo the surge tank. The inner diameter was optimized and the diameter of 2.8 m wasobtained. Structural analysis was conducted to determine the section and reinforcementof the concrete lining on the basis of the theory of elasticity of thick cylinder. The rocksupporting system was also designed under the condition of the NATM (New Austriantunneling Method) tunneling method.

Fig. 7-2 Profile of Headrace Tunnel

Surge tank

A orifice type surge tank was selected considering the hydraulic characteristics andtopography. The inner diameter of 6 m is designed and structural analysis was conducted.Surging pressure and water hammer pressure are analyzed using computer programsdeveloped by the Consultant.The geology of the surge tank is similar to the headracetunnel, which consists of sandstone and mudstone. Based onthe geological information, a structural analysis was carriedout by means of a two-dimensional frame model and theconcrete lining sections and the supporting system aredesigned.

Vertical shaftThe similar geology for the vertical shaft design is expectedto the headrace tunnel, which consists of sandstone andmudstone. However, an unconformity plane between theupper formation and the lower formation will be encountered.There may be some potential of water leakage along thisunconformity plane. The thickness of concrete lining isdesigned to be 40 cm and the upper and lower bendingportions are installed steel liners, where the large scale ofexcavation is to be conducted and the surrounding rocksseem to be disturbed extensively. Excavation of the verticalshaft is reaming and smooth blasting methods are to beapplied.

Lower pressure tunnelThe lower pressure tunnel consists of the non steel liner section with 2.8 m inner diameter(ID) and 850 m length, the embedded steel liner section with 1.8 m ID and 3,591 mlength, and the open penstock section with 1.8 to 1.55 m ID and 121 m length. Thetunnel route is basically drawn connecting the tunnel under the surge tank and thepowerhouse on a line to minimize the length of the pressure tunnel. Since the cost of thepressure tunnel lined with steel liners is one of the major factors in the total project cost,the shortest pressure tunnel with steel liners is preferable.The optimization of the diameter and plate thickness of the steel liners was carried out atthe total 29 calculation points. The final diameter and plate thickness were arrangedjudging from smooth connection of the liners. Various pressures acting on the tunnellining and steel liners such as water hammer pressure, surging head, static head, andexternal pressure are considered in the structural design. Stability of the anchor blockand ring girder foundations of the open penstock were examined in terms of overturning,sliding and bearing capacity of the foundation.

Fig. 7-4 Lower Pressure Tunnel Profile

Powerhouse and switchyardThe powerhouse and the switchyard will be constructed on a flat plane on the right bank of the

Houay Lamphan Gnai River which is located where the river bends from the east to thesouthwest as shown in Fig.7-6. This location is selected in order to minimize the lengthof the lower pressure tunnel from the surge tank.

Fig. 7-6 Powerhouse andSwitchyard General Plan

Fig. 7-5General Profile of Open Penstock

The scale of the powerhouse building is designed so as toaccommodate two (2) units of Pelton turbines,generators and auxiliary equipment. The requiredsize of the building for two units is approximately 25m wide, 50 m long, and 30 m high. As shown inFig.7-7, the building consists of four (4) floors underthe ground and one (1) floor on the ground with two(2) floors of office space on the ground on the eastside. An erection bay is located on the northwestend of the powerhouse building where trailer trafficfor transportation of heavy equipment can beaccommodated. The switchyard area will bedeveloped on the northwest side of the powerhousewith a size of 65 m in width and 85 m in length. Inthe switchyard, there will be a control house, and thearea will be protected with a fence and gate.

The flood water level in the case that the spillway spills out the design flood is estimated to beEL. 202.19 m. This flood elevation will be referred to for the design of the bridge,revetment works around the powerhouse, and the road.

Electro-mechanical equipmentThe following design concepts were considered as the Project will be a key power plant in the

Southern Grid.• Each generator unit is designed to have its own separate auxiliary equipment

including the main transformer, turbine auxiliary equipment and control system.• Attention is paid to synchronizing the different power systems by the HLG power

station switchyard bus connection circuit breaker.• The whole power station system is designed to have a self-start-up function or a so

called “black start function” and also designed to have a transmission linecharging function.

For the effective head of 536.4 m and unit discharge of 9.25 m3

/s, a Pelton type turbine isselected, which is designed with a rated output of 43,000 kV and a rated speed of 429

min-1

. The turbine center level at EL. 205.00 is determined to be around 3 m higher thanthe tailrace flood water level at EL. 202.19 so as to consider some margin for the tailracewater level fluctuation. Generator rated output (Pg) is calculated to be 47,100 kVA fromthe data below:

Turbine rated output (Pt) 43,400 kW Generator power factor (p.f) 0.9Generator efficiency (ηg) 0.977

Generation rated voltage of 11 kV is selected considering the generator output range of theHLG Project. An inlet valve of a spherical type is installed for each power unit.

Transmission line and Sekong Substation expansionTransmission line route from the HLG switchyard beside the powerhouse to the Sekong

Substation (S/S) is selected with 115 kV and 2 circuits. One circuit is planned to connectthe Salavan Substation via the Sekong Substation. By this plan, Salavan S/S - HouayLamphan Gnai Power Station- Sekong S/S will be a looped connection, which will havean advantage for better stabilities on system.

After the Pre-Feasibility study in 2006, the construction plan of the Sekong Substationbecomes more realistic through the discussions and agreements between relatedauthorities of the Lao PDR and Vietnam, and 115 kV transmission line Salavan - Sekongis on the list of future construction project by EDL.Based on those fact and agreements with relevant parties, the tentative consideration to

transmit generated power to the Ban Sok 500 kV substation is not feasible, as the BanSok 500 kV substation will be established to export power to Vietnam and applyingvoltage level will be 230/500 kV, not 115 kV.

8. CONSTRUCTION PLAN AND COST ESTIMATE

The total construction period is estimated to be 50.6 months including the commissioningtest of the electro-mechanical works for 4 months. Assuming that it takes one and halfyears from the beginning of 2010 for preparatory works such as financial arrangement,negotiation of power purchase agreement and concession agreement, resettlement andaccess road construction, and bidding and negotiation of the EPC contract, the Projectwill commence the commercial operation from October 2015.

8.1 Construction Plan

The critical path is appeared in a series of construction works for the access roads in theProject areas, the adit to lower pressure tunnel, the lower pressure tunnel and the verticalshaft as shown in Fig.8.1-1. All of these works are related to the construction of thevertical shaft as shown in Table 8.1-1.

Table 8.1-1 Critical Paths of the HLG HE Project

The temporary facilities and access roads for the construction are shown in Fig.3. The rock materials for concrete aggregates and soil materials for the earthfilldam are borrowed from the quarry site located in the mountainous area around 1km north and downstream from the damsite.

The dam consists of the RCC dam and partly the earthfill dam. Upstream anddownstream coffer dams and a diversion tunnel are to be constructed in order todivert the river flow for the dam construction. The diversion tunnel is designed for5-year return period flood discharge. It is more economical method to transportthe concrete for the RCC dam by dump trucks to the damsite than that of cranes,belt conveyers, incline carriers, considering topographic condition and the damlayout. Regarding the earthfill dam, foundation treatment is the most concernedpoint. The excavated face on the left bank should be covered with shotcrete justafter excavation to avoid weathering. The embankment materials shall beimpervious and compacted carefully.

The excavation and placement of concrete lining of the headrace tunnel will beconducted from the intake to the surge tank. No intermediate adit is necessarybecause this work is not on critical paths. .

ItemsHydrology Catchment area main river

diversiontributaries

(total)

Reservoir inflow main river

tributariesdiversion

3.9 m

(total) 11.4 m

Output Installed capacity

Annual generated energy-0.48%

use

Tailrace

7.3M5.9M6.6M6.7M4M3M1.0M1M1

An adit to the intermediate elevation of the vertical shaft is difficult to constructbecause of geology and topography of the slope forming an escarpment of theBolaven Plateau. Therefore, working faces to connect the long vertical shafthaving 514m length is limited. A vertical shaft should be excavated by a pilot holefrom the top of the shaft, reaming from the bottom and blasting from the top. Inaddition, the lower pressure tunnel is so long: approximately 4.4 km from thebottom of the vertical shaft to the powerhouse. Because of topography, a route ofthe construction adit to the lower pressure tunnel is limited. Those works are onthe critical paths and are related to the construction of the vertical shaft and thelower pressure tunnel. In this connection, the adit No.1 was planned with totallength of 1,950 m in order to shorten the schedule effectively and to connect 3locations along the lower pressure tunnel. A construction adit No.2 accessing tothe headrace tunnel and the top of the vertical shaft will be excavated. Theseconstruction adits are presented in Fig. 8.1-1.

Fig.8.1-1 Construction Adits to the Waterway

Adit No.2Adit No.1

8.2 COST ESTIMATE

Costs of civil works are estimated with a BOQ basis using the quantities calculated by thedrawings and unit costs for major structures. Costs for metal, the E/M and thetransmission line works are estimated on the basis of manufactures information, empiricalcorrelations, cost estimates of recent similar hydropower projects and so on taking pricehike into consideration.

The main conditions and assumption used for estimating the Project cost are given below:• Project implementation is expected EPC (Engineer-Procurement-Construction) contract

basis.• For this Feasibility Study, quantities of the permanent works are calculated by BOQ

basis, and temporary works and overhead is Lump Sum basis.• The temporary works and overhead are counted by percentage to the sum of permanent

work cost.• Rates of local portion and foreign portion are referred to the hydropower projects

experienced by the Consultant in the South-East Asia countries.• Costs for the Resettlement and Ethnic Minority People's Plan (REMPP) are estimated by

the Consultant 2.• EPC Contractor's engineering cost is assumed to be 2 % of the total construction cost.• Project management cost consists of administration cost and engineering supervision of

the Owner's side.

Summary of the total project cost is presented in Table 8.2-1.

Table 8.2-1 Summary of Project Cost

Items Main FeaturesHydrology Catchment area main river 144 km

diversiontributaries

93 km2

(total) 237 km2

Reservoir inflow main river 7.5 m3/s

tributariesdiversion

3.9 m3/s

(total) 11.4 m3/s

Output Installed capacity 84.8 MW

Annual generated energy 452 GWh/y-0.48%Shaft 2.80m I.D.Steel Lining

1.55m I.D.Concrete Lining 2.80m

I.D.Steel Lining 1.85m

I.D.L=3,590.99Powerho

useSwitchyard

Tailrace4.2M5.9M1M3MCo

mpletion

7.3M5.9M6.6M6.7M4M3M1.0M1M1

Mcompletion : 50.6M

Average plan factor 61%

Peak operation hours 13 hours

Reservoir High water level (HWL) 820.00 m

Rated water level (RWL) 812.00 m

Low water level (LWL) 795.00 m

Max storage volume (at HWL) 141 mil m3

Active storage volume 122 mil m3

Design sedimentation volume (50 years) 4.5 mil m3

Reservoir area (HWL) 6.8 km2

Dam Type RCC dam Earthfill dam

Max dam height 79 m 41 m

Dam length 565 m 65 m

Dam crest elevation (EL.) 824.00 m 824.00 m

Estimated dam base rock level 745.00 m 783.00 m

Spillway Design discharge (1,000 year) 795 m3/s

Waterway(Total 7,947.05 m long)

Headrace tunnel Inner diameter (ID2.8) 2,830.83 m

Note : * : Cost estimate of this item is conducted by Consultant 2.

8.3 Implementation Schedule

Estimated construction period is 4 years and 3 months from the notice to proceed to anEPC contractor to implementation of commercial operation of the power generation.Implementation schedule are estimated assuming an EPC (Engineering, Procurement andConstruction) contract basis. The overall implementation schedule is estimated as shownin Fig. 8.3-1.Before the commencement of the construction for the Project, the following activities willbe required to be carried out.

(1) Formalization of Agreements (C/A, PPA etc*.)(2) Project Financing(3) Preparation Bid Documents(4) Prequalification, Bidding, Bid Evaluation for EPC contract(5) Land acquit ion and Resettlement(6) Preparatory works by the Owner (Improvement of existing road etc.)

* C/A : Concession Agreement, PPA : Power Purchase Agreement

Fig. 8.3-1 Implementation Program

9. ECONOMIC AND FINANCIAL EVALUATION

9.1 Financial Analysis

Basic cost includes the costs of construction by EPC contractor (US$ 163.2 million), Owner'spreparatory works (1.6), environmental impact mitigation measures (25.5), and projectmanagement (4.8). The total base cost amounts to US$ 195.1 million. The followingtables show assumed financial arrangement and the total investment cost.

Table 9-1 Summary of Financial Arrangement and Cost Breakdown

Loan conditions are assumed as shown in the below table.

Table 9-2 AssumedLoan ConditionsApplicable to the

HLG Project

Note: Financial Feeincludes Front-End Feeand CommitmentCharge

Financial highlights for the HLG Project are shown in Table 9-3.

ItemsHydrology Catchment area main river

diversiontributaries

93 km

(total) 237 km

Table 9-3 Financial Highlights for HLG Project

ConclusionThe results of the financial analysis indicate that the HLG Project is financially feasibleunder the above conditions. Especially, EDL/Lao will be expected to get high rate ofreturn on their equity. On the other hand, the private investors would get the minimumfeasible rate of return of 11.0 % under the assumed financial structure. Therefore,measures for the enhancement of the private investors participation seems to beimportant. A conceivable enhancing measure is that a profit tax holiday becomeseffective for whole operation period instead of 5 years, and a royalty fee is reduced to 1.0% of the sales revenue instead of 5.0 %, because the conditions of tax and levy will besubject to the negotiation between the developers and the relevant governmentorganizations of the Lao. If the above enhancing measure is adopted for the HLGProject, the ROE for the private investors would be 12.4 % and will attain the feasiblecriterion of 12 ~ 13 %.

9.2 Economic Analysis

In the Economic Analysis, an L/C portion of the Base Cost is converted to economiccosts from financial costs by using a Standard Conversion Factor (SCF) of 0.90 followingthe EIRR Analysis of the THH Project. The total economic project cost is US$ 202.3million or 4.2 % less than the financial project cost. Price contingency used in thefinancial analysis is not considered in the economic analysis. Duties, taxes and subsidiesare not considered in the economic analysis because those taxes and duties are regardedmerely as domestic transfers of the capital.

The benefit of the project is the incremental volumes of the power supplied to thosebeneficiaries. The contemporary method of economic appraisal is to define and directlyquantify in monetary terms and evaluate the benefits arising from the project as comparedwith the economic cost of the project in obtaining the economic internal rate of return(EIRR). In the instances where the measurement and quantification of benefits aredifficult, the analysis takes an alternative project which can generate the same quality andamount of benefit but could be constructed at the least cost compared with the projectbeing appraised. The economic analysis compares the cost of such a least cost alternativeproject against the project being appraised by quantifying the saving in cost as the benefitof the project. Traditionally in the power sector, the least cost alternative method used tobe the predominant methodology but has changed during the past decade by adopting themethod of directly quantifying the benefits in monetary terms. For the quantification ofthe benefit, the contemporary method uses the measurement of the Willingness-to-Pay ofthe consumers for the purchase of electricity. In this study, the Willingness-to-Pay wasapplied for counting the benefit of the Project.

Items Main FeaturesHydrology Catchment area main river

diversiontributaries

93 km2

(total) 237 km2

Reservoir inflow main river 3

ConclusionERR (economic internal rate or return) results in 13.7 % and surpassing the threshold of10-12 % which international donor institutions generally conceive as the feasibility line.Therefore, the HLG Project seems to be economically feasible.

10. CONCLUSION AND RECOMMENDATION

10.1 Conclusion

The Houay Lamphan Gnai Hydropower Project (the Project) will generate the maximumpower of 84.8 MW and the average annual production energy of 452 GWh with the basiccost∗ of US$ 195.1 million including the cost for environmental impact mitigationmeasures of US$ 25.5 million. The Project is feasible in terms of engineering technique,economical and financial benefits, and environment according to the Study. TheConsultant would like to highly recommend early implementation of the Project so as tocommence the commercial operation from October 2015.

1) The scale of the Project was studied and the following optimum project features wereobtained.

Installed capacity: 84.8 MWAnnual production energy: 452 GWh

Maximum Turbine Discharge (Qmax): 18.5 m3

/sHigh Water Level (HWL): EL. 820.00 mRated Water Level (RWL): EL. 812.00 mLow Water Level (LWL): EL. 795.00 mPelton Turbine Center Elevation: EL. 205.00 mPeak Duration Time: 13 hours

2) According to the reservoir simulation study using daily discharge record from January1991 to December 2007 for 17 years, the Project can generate more than 80 MW ofpower during peak time over 75 % of the time over a simulation period of 17 years.Moreover, approximately 60 % in the wet season and 40 % in the dry season of theannual production of energy can be generated. Specifically, the HLG Project cangenerate power even in dry season and this is the most important role of the Projectin the Southern Grid.

3) The final project layout would be the best selected among the several layouts includingan open penstock option, a underground powerhouse option, and a rockfill type dam.

4) The tributaries diversion is essential for the project viability. By this intake facility,

average inflow rate could be increased by 3.9 m3

/s and the total inflow rate at the

damsite becomes 11.4 m3

/s.

∗Basic cost includes the costs of construction by EPC contractor (163.2 M), Owner's preparatory works (1.6 M),

environmental impact mitigation measures (25.5 M), and project management (4.8 M).

5) Riparian lease of 1.0 m3

/s at the maximum can be discharged from the weir in theHouay Mout basin through the year and 1.0 m3/s at the maximum from the weir inthe Houay Pouy basin in the dry season.

6) Transmission line route from the HLG switchyard beside the powerhouse to theSekong Substation is selected with 115 kV and 2 circuits. One circuit is planned toconnect the Salavan Substation via the Sekong Substation. By this plan, Salavan -Houay Lamphan Gnai Power Station- Sekong will be a looped connection, whichwill have an advantage for better stabilities on system.

7) The total construction period is estimated to be 50.6 months including thecommissioning test of the electro-mechanical works for 4 months. The critical pathis appeared in a series of construction works for the access roads in the Project area,the adit to lower pressure tunnel, the lower pressure tunnel and the vertical shaft. Allof these works are related to the construction of the vertical shaft.

Assuming that it takes one and half years from the beginning of 2010 for preparatoryworks, the Project will commence the commercial operation from October 2015.

8) Socio-economic impacts will be a major consequence. Two villages are within thereservoir and inundation zone - Thong Gnao and Thong Kong - and will requirerelocation, affecting 189 households. As originally proposed to receive theresettlers, adjoining the village of Ban Nongkan is small and currently an extendedarea is being investigated and assessed for suitability by District agency staff.

9) The footprint of the developments will have low impact on the natural terrestrialenvironment. The main impacts will be on the hydrology and aquaticenvironments. Reductions in flow will be significant but there is low fishbiodiversity and no endemic species in this reach and impacts will be mitigated by ariparian release from the Houay Mout and the Houay Pouy tributaries.Management of the reservoir area both before inundation and during operation willreduce oxygen demand and methane emissions from the decomposition of floodedvegetation.

10) The Project is financially and economically feasible under the conditions presented inChapter 15.

Financial evaluationThe result of the financial analysis is presented in Table 9-3. According to the financialanalysis, EDL/Lao will be expected to get high rate of return on their equity. On theother hand, the private investors would get the minimum feasible rate of return of 11.0 %under the assumed financial structure. Therefore, measures for the enhancement of theprivate investors participation seems to be important.

Economic evaluationERR (economic internal rate or return) results in 13.7 % and surpassing the thresholdof 10-12 % which international donor institutions generally conceive as the feasibilityline. Therefore, the HLG Project seems to be economically feasible.

10.2 Recommendation

The Project will be developed by EDL in private partnership and constructed by an EPC(Engineering, Procurement and Construction) contract. In this regard, we would like torecommend the followings;

10.2.1 Supplementary Investigation

An EPC contract is a kind of a turn-key contract and an EPC contractor is responsiblefor all of the works for the construction of the Project with a fixed contract price agreedby contractors and a client. The contractors, therefore, include the costs in their bidprice for overcoming the risks to be expected in the construction works.Recommendation herein is the additional investigation works to reduce such costs asmuch as possible for the risks resulted from short hydrological record and unidentifiablesubsurface.

(1) Hydrological observation

Long term record of water level at the site is essential for reliable estimate of low flow andflood flow for the design of temporary facilities during the construction and thepermanent structures of the HLG Project. The total length of the available daily waterlevel record at site is 28 months from November 2005 to April 2007 and from July 2008to April 2009. Discharge measurement has been conducted 10 times in Pre-feasibilityStudy and 8 times in this Study. If the water level observation using the existing staffgauge, probably one or two years record could be accumulated. This accumulatedobservation record will be a base for the EPC contractor to estimate more precisehydrological information with higher reliability.

Moreover, as mentioned in Section 4.3.2 (2) "River Bed", the record observed at thedamsite provably not include the amount of leakage. Although measurement is just onetime in May 2009, the more amount of river flow water can be expected, especially inthe dry season. The addition of the water flow increases power output of the Project andmerits economic and financial viability of the Project. The water level measurement andperiodical discharge measurement at the upstream reach is also recommendable.

(2) Geotechnical investigation

In this feasibility study, the Consultant has made drilling investigations of total 280 m at6 holes in the damsite. The number and the length are rather large compared to thosecarried out in other feasibility studies in the past. However, as mentioned in Section 4.7"Geological Check Points in Next Stage", additional drilling investigation is necessaryto clarify certain questions that have been raised in the Study. The main questions arethe permeability of the unconformity plane identified on the left bank, the geologicalconditions of the dam toe in the riverbed, shearing stress of mudstones on the rightbank, the properties of the clayey sediments distributed in the left bank, etc. If thisadditional investigation can be conducted before bidding of the EPC contract, morevivid geological information could be provided to bidders. This information will beeffective to reduce the risks for the bidders.

10.2.2 Early Implementation of Preparatory Works by the Owner

Present power supply condition in the Southern Grid is serious and interconnection tothe Central 2 Grid is being planned. Early commercial operation of the HLG Project isdesirable. Once the project implementation is decided, therefore, the preparatoryworks should quickly carried out as much as possible by the Owner in order tocommence the operation of the Houay Lamphan Gnai Hydropower Station in 2017 orearlier.

In this regard, early implementation of resettlement and compensation works and roadconstruction by the Owner are recommendable in addition to the other essentialpreparatory works such as financial arrangement and negotiations of power purchaseagreement and concession agreement.

The relocation of the Thong Gnao and Thong Kong villages should be completed by theOwner before commencement of the EPC contract in order to shorten the constructionperiod and reduce the cost. It is also recommended that the Owner construct thepermanent access roads from the junction with the national road to Thongvay villageand the damsite and to Sathoua Tai Village and the powerhouse because some parts ofthe permanent roads overlap with the roads for resettlement and compensation. Theseworks can be implemented during the period of negotiations of the power purchaseagreement (PPA) and concession agreement (CA), project financing, and biddingprocedures.

10.2.3 Conservation of River Basin

In the Study on sedimentation, annual sediment yield of 416 ton/km2

/year or 314

m3

/km2

/year was estimated and it was found in the reservoir sedimentation simulationstudy that the sedimentation would not reach the intake crest at EL. 792 even after 100years. This is the conclusion assuming that the present forest condition in the riverbasin would be maintained for ever. In the site reconnaissance, however, theConsultant saw many logging roads developed disorderly and active logging activities

in the mountains. The catchment area of the Project is just 144 km2

. Unless loggingactivities are banned, the basin will easily be naked as many dams in the world havebeen suffered from sedimentation with development of basins.

Thus, conservation of the river basin is strongly recommended. Firstly, a ban of loggingin the basin should be proposed to the government.

10.2.4 Recommendation to be conducted in EPC Contract

The following recommendations should be mentioned in the Owner's Requirements ofbidding documents for an EPC contract.

(1) Hydraulic model tests for spillway, intake, and tailrace design

An un-gated spillway is selected in the spillway design. This type of the spillwayconsists of a overflow section, guide walls on the downstream dam face, and a stillingbasin (dissipater). As large amount of flood water will be discharged with high speedfrom the spillway overflow section, special attention should be paid to design of theguide walls such as layout, height, and deflectors on the top the guide walls. The stillingbasin is designed with a curve in its layout to fit the river flow direction. This effectshould also be confirmed by the hydraulic model test.

Very complex flow with high speed is expected in a pond under Pelton turbines and thetailrace culvert. Shape and size of these portions in the powerhouse should be finalizedby the hydraulic model test.

Regarding the intake, a form of a inlet portion and depth of tunnel portion should beexamined in order to avoid vortices and other abnormal hydraulic effects.

(2) Self-start-up function of the power station

The Project will be a largest and a main power station in the Southern Grid aftercommencement of operation. A role of the power station is very important. Therefore,a self-start-up function is essential, by which the power station can resume powergeneration without power to be supplied by the other power stations even after blackoutin the whole grid.