BUSINESS OF LHSE
Lao Holding State Enterprise (LHSE) is a business entity of the Government of Lao PDR (GOL) for investment in electric power sector. It is intended by GOL to use LHSE for holding GOL shares in IPP project companies and administer GOL interests under project Shareholder Agreements. With GOL support, LHSE shall raise capital to meet GOL equity commitments, manage and disburse GOL receipts from dividend, re-financings, etc.
As investment of LHSE concentrates in IPP projects, therefore, the scope of business of LHSE does not include development and operation of generation, transmission and distribution facilities designated for domestic use only. The IPP project(s) that LHSE invests is to provide cross-border bulky power supply in accordance with power purchase agreement.
The Business Registration Certificate of LHSE specifies that the business activities of LHSE are electric power business and Fly Ash business in Hongsa Minemouth Power Project.
The Articles of Association of LHSE, Article 5 on Objectives, stipulates that the primary function of LHSE is to hold, manage and maintain on behalf of GOL, shares in Nam Theun 2 Power Company Limited (NTPC) and any other Power Project Companies which are acquired by LHSE or transferred to it by GOL, in an efficient and businesslike manner.
The first investment of LHSE is the investment in the Nam Theun 2 hydropower project, which is the single largest project ever developed in Lao PDR. LHSE is a 25% shareholder in NTPC and it has the potential to acquire more shares up to 40% in the NTPC in future, according to Concession Agreement between the GOL and NTPC.
LHSE has the ability to invest in other power project companies on behalf of the Government. While LHSE might grow in this respect, Nam Theun 2 will always be the founding investment and a cornerstone of LHSE’s business.
LHSE is learning a great deal from the investment in Nam Theun 2 project and will continue to learn as the project is built and put into operation. The Nam Theun 2 demonstrates LHSE’s continued commitment to working in partnership with private sector and engaging positively with international financial community.