The US$1.2 billion (Bt46.1 billion) plant will have the capacity to produce 600,000 kilowatts a year. It will be set up at Hutgyi, Burma, near the Thai border, and will be the first on the 2,800-kilometre Salween River, Southeast Asia's longest waterway without a dam.

A press note released by China's state-owned Assets Supervision and Administration Commission obtained by Agence France Presse also said it was the first of five hydropower stations China, Thailand and Burma had previously said they planned to build on the Salween.

Energy Minister Viset Choopiban said after his visit to China that a memorandum of understanding had been signed while he was there. He said the ceremony had also been attended by Chinese senior officials, including Zhang Guabac, vice president of the national development board, Zhai Hauhui, deputy minister for the hydropower ministry, and Huang Baodong, chief of Sinohydro Corp.

Pornchai Jujiprabha, deputy permanent secretary at the Energy Ministry, said the plant would fulfil the government's policy to tap power in neighbouring countries. He said negotiations on a joint venture for a hydropower plant at Hutgyi dam were ongoing.

Kraisi Karnasuta, Egat's governor, said the project should generate around 1,000 to 1,200 megawatts in its first stage.

The agency will consider feasibility and other details of the investment this year. Egat and its subsidiaries expect to hold a 50-per-cent stake, Sinohydro Corp, 40 per cent, and the Burmese government, the rest.

He said the project should shave Bt28 billion off Thailand's energy costs as it should reduce the use of fuel oil in power production.

However, the projects have drawn intense fire from environmentalists and other critics who say the dams could severely damage the river's fragile ecosystem and destroy biodiversity, eventually affecting livelihoods of people living along the waterway.

The Nation,

Agence France-Presse