Clifford Chance has closed the financing deal for the controversial US $1.25bn Nam Theun 2 hydropower project in Laos.

CC acted as international counsel for the foreign sponsor consortium and the project company, Nam Theun 2 Power Company, while A&O acted as the international counsel to the lenders. 

The project involves the construction of a 1,070 MW hydroelectric plant, which will be used mainly to supply Thailand with power. The deal is the largest ever foreign investment project in Laos and the biggest internationally financed power project in Asia since the 1997 financial crisis.

While the project will undoubtedly boost the struggling Laos economy, environmental and social activists, who have delayed the completion of the project, have warned it will be at the expense of the local eco-system and dis-place thousands of local people.

The government has countered this claim by stating that once the project is operational in 2009, it will generate US$2bn in revenue over the next 25 years. The Laos government says it will spend this money reducing poverty.

CC acted on all the equity arrangements, the concession with the Laos government, the power purchase agreements and the turnkey construction arrangements.

The CC team was lead by Singapore partners Sam Bonifant and Russell Wells, with counsel Nambi Viswalingam, and associates Andrew Brereton, Tan Kee Hwee, Andrew Reid, Duncan Bloack and Louise Groom from Singapore assisting. Shanghai partner Ting Ting Tan, London partner Tim Steadman and Bangkok partners Tim Jeffares, Paul Fulton and Rod Cameron also assisted.

"The negotiation and completion of the commercial and financing arrangements for Nam Theun 2 was an exacting and time consuming task in order to accommodate the many complex issues inherent in an environmentally sensitive cross border project of this nature," Bonifant said.

A&O advised on all aspects of the financing and also liased with the lenders' other advisors, Chandler & Thong-Ek and the Mekong law Group.

A consortium of nine international and seven Thai banks are funding the project, including ANZ, BNP Paribas, Societe General and the Bangkok Bank.