Egat governor Kraisi Karnasuta said the power-purchase contract would be signed on Friday in Vientiane.

"The Attorney-General's Office has screened the contract and a special clause will be added: that in case of disputes, Thai law would be applied and the case would fall under the Thai arbitration committee's consideration," he said.

Under the contract, Nam Ngum II, with 615 megawatts in installed capacity, will be able to feed in power from 2013. The power is quoted at Bt1.99 per unit throughout the contract.

It will be used mainly to feed the Northeast, where power consumption is expected to expand 5 per cent this year. At present, it consumes 2,000MW a year.

Egat will purchase the power from Southeast Asia Energy Ltd. The company has seven shareholders: Ch Karnchang Plc, which holds 28.5 per cent; the Lao government, 25 per cent; Ratchaburi Electricity Generating Holding Plc, 25 per cent; Bangkok Expressway Plc, 12.5 per cent; Shlapak Development Co Ltd, 4 per cent; PT Construction & Irrigation Co Ltd, 4 per cent; and Team Consulting Engineering and Management Co Ltd, 1 per cent.

The power purchase is part of  Thai-Lao cooperation in promoting electricity generating in Laos. Thailand previously inked deals for purchases from Nam Thuen-Hin Bun, Huay Ho and Nam Thuen II. Kraisi said Egat was also in negotiations to buy  power from other Laos projects, including Nam Ngum III.

"Hydropower carries a low cost of production and the cost does not move in line with fuel prices. This would help keep the price of power supplied to Thailand at a low level," he said.

On financing, Kraisi said Egat was discussing with the Finance Ministry limit it can borrow each year to fund its investment.

"As Egat resumes its state enterprise status, our borrowings are automatically counted as public debt," he said.