In the end of 2006, the Memorandum of Understanding (MOU) for the development of Nam Long Hydropower Project, was signed between the relevant authorization of Luang Nam Tha Province and Luang Paseuth Construction Sole Co., Ltd (LCC). LCC commenced Pre-feasibility Study and the Initial Environment Evaluation of this project, by their first site survey in February 2007 for engineering data collection that related to the study. In order to implement the Nam Long HydroPower Project, Nam Long Power Co., Ltd. (NL) has been established between Luangpaseuth Construction Sole Co., Ltd. (LCC) and Electricite Du Laos (EDL). The purpose of Nam Long Power Co., Ltd. is to Build, Own, Operate and Transfer (BOOT scheme) the Nam Long Hydropower Project.

Nam Long Hydropower Project is a 5MW project, the forecasted annual electricity production is about 37 GW/h. Since Luang Nam Tha was behind in attainment of the EDL grid, it started import electric from China in 2003. The import electricity mainly is to supply central Namtha and Sing Districts. In overall about 35% of the total households of the Province has been electrified. Long district is one of non-electrified districts belong to Luang Nam Tha Province. It is the town where Nam Long Hydropower Project to be located and only 18km from the town center. Long District is one potential electricity consumer of the Project. In addition, there are copper mining invested by Chinese company located just 21 km from the Project Site. This mining needs electric power to feed their processing plant initially about 3 MW and ready to double its capacity within couple months. Moreover, Long district has large potential for tourism industry due to its beautiful nature and nice whether almost year round.

The Feasibility Study has presented a large interest in Nam Long Hydropower Project it would be the local energy source for Luang Nam Tha Province, and may consequently replace China electricity import. It is an important step toward energy independence for Laos.

The project will be financed by a project finance method which is mixture of equity and shareholders loan. It is assumed here the project company will put up the equity covering 30% of project cost, while loans cover the remainder. The equity share of the Luangpaseut Construction Sole Co., Ltd. is 80% and the equity share of EDL-Generation Public Company (EDL-GEN) is 20% of the total equity.

Firstly the FIRR of the project is considered acceptable. This exceeds significantly the interest of loans (10%). This means Nam Long is worthwhile for implementation from the view point of investor.