Teaching Case - Financing the Theun-Hinboun Hydroelectric Project

Financing the Theun-Hinboun Hydroelectric Project

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  • Product Description

    Abstract:
    How does a public-private venture emerge in one of the world's poorest countries (Laos) and how does it obtain $280 million in financing for a 215 MW hydroelectric facility to supply power--not to the host country, but its neighbor? At the time of the project, Laos had no domestic capital market, and commercial lenders and equity investors believed the country too politically and economically risky. As a result, Laos had almost no foreign direct investment and had never entered into a public-private venture for energy infrastructure.

    Learning Objective:
    The case allows the instructor to 1) discuss the difficulties of funding a project in a very poor country; 2) introduce the role of multilateral banks, such as the Asian Development Bank and export credit agencies; 3) discuss the importance of risk allocation in gaining investor confidence; 4) discuss currency risk and its impacts; and 5) touch on the political economy of hydroelectric facilities. It is a good capstone case for a financial module.

  • Other Details

    Publication Date: February 21, 2006
    HKS Case Number: 1829.0
    Case Author: Henry Lee
    Faculty Lead: Henry Lee
    Pages (incl. exhibits): 20
    Setting: Asia
    Language: English
    _year: 2000-2009
    _pages: 16-25
    _geography: Asia
  • Warranty Information

    /review/1829.0.EducatorCopy.pdf

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