KUALA LUMPUR: Mega First Corporation Bhd
has secured loan facilities totalling US$150mil or RM634.87mil to part finance the building of its Don Sahong hydropower project in Laos.
It said on Tuesday its unit Mega First Investments (L) Ltd had entered into facility agreements with various financial institutions for club deal facilities totalling US$150mil comprising – term loan facilities totalling US$85mil and an Islamic financing facility of up to US$65mil.
The facilities would be used to part finance the construction of the project undertaken by Don Sahong Power Co. Ltd, says Mega First, which is involved in power generation and property development.
“Based on today’s cost of funds, the weighted average interest is 4.51%,” it said.
As for the conventional facilities, the tenure is up to six years with repayment of principal commencing after Dec 31, 2019 or such other later date as may be agreed by the relevant parties.
As for the Islamic financing facility under the shariah principle of tawarruq (commodity murabahah), the tenure is up to six years with repayment of the financier’s sale price starting three months after the first disbursement / utilisation date.
According to Mega First's website, the Don Sahong hydropower project is a run-of-river hydroelectric power scheme located in the Khong District of Champasak Province in Southern Laos. The scheme has been designed with a generation capacity of 260MW.
The dam will be located at the southern end of the Sahong channel, one of seven major channels of the Mekong River in the Siphandone (Four Thousand Islands) area that flow over the geological feature called the “Great Fault Line”.
The project would utilise 15% of the total Mekong flow.
The dam and associated embankments will create a small head-pond (inundating approximately 125 hectares of land) between the islands of Don Sahong and Don Sadam.
This head-pond will allow the natural fall of approximately 20m across the “Great Fault Line” to be utilised for power generation.
The ultimate goal is not only to build an economically viable project, but one that will provide the infrastructure, opportunity, and assistance for local development.
While producing 260MW of renewable energy for the expanding Lao national grid, the Don Sahong project would make a significant contribution to the socio-economic development of the country.