A string of Asian banks have agreed to facilitate US$643mn of funding with Laotian firm Nam Ngiep 1 Power Company (NNP1) for financing a hydro power plant project.

The facility is being co-financed by the Asian Development Bank (ADB), Siam Commercial Bank, Bangkok Bank, Kasikornbank, the Export-Import Bank of Thailand, JBIC, Mizuho Bank, Sumitomo Mitsui Banking Corporation and the Bank of Tokyo-Mitsubishi UFJ.

The Asian Development Bank and JBIC signed the loan agreement last week.

It’ll be used to finance the construction and operation of the 290 MW dam-type hydro power plant on the Nam Ngiep River in Bolikhamxay Province, Lao PDR.

The governments of Lao PDR and Thailand signed a MoU on the comprehensive power export, which will see most of the electricity produced over the next 27 years sold to the Electricity Generating Authority of Thailand (Egat) and some to Laotian state-owned Electricite du Laos.

A JBIC statement says that the loan will financially support Japanese firms’ participation in overseas infrastructure projects. It adds: “It will contribute to maintaining and strengthening the international competitiveness of Japanese industries.”

The cross-border project within the Asean region has been praised by the ADB, which states: “As one of major export hydropower projects in Lao PDR, the project will contribute to the country’s economic growth and is an important component of the government of Lao PDR’s poverty-reduction strategy. For Thailand, the project supports sustainable development through the provision of clean energy and energy diversification.”