Laos Sustainability Report

16 Guaranteeing project quality O Quality management system PowerChina adopts the "1+2+3" management model in the Nam Ou River hydropower stations project in Laos, meaning that centering on the priority of onsite control, the basin company monthly control and supervision as well as the daily control of supervision, design and construction units are incorporated; importance is attached to "the three links" of visits of the construction site, communication with all participating construction units, and dialogue with employees of the project department; onsite control is enhanced and refined management is implemented for the project, achieving overall streamlining and control of the construction of level-2, level-5 and level-6 hydropower stations of the Phase I project, thus effectively ensuring the smooth attainment of various node targets. Onsite quality control of Nam Ou River Level-3 Hydropower Station In the construction of Nam Ou River Level-3 Hydropower Station, the principle of total quality control was followed to fully strengthen onsite quality control. Participating units established their respective quality assurance system and quality management system, and specified quality responsibility and quality management requirements for their respective departments and positions. Monthly quality check was organized for all participating units which resulted in monthly quality inspection bulletin. In a period of one year, 489 units of the main project were inspected and accepted, with an acceptance rate of 100%; among them 440 units were rated "excellent", accounting for 90%. There was always solid quality management and onsite quality control. Projects of ingenuity Since it entered the Laotian market more than 20 years ago, from constructing roads to the site of Nam Leuk Hydropower Station by No. 15 Bureau of SINOHYDRO under PowerChina to helping the Laotian government build the "Southeast Asia Battery", the company has contracted over 30 projects, involving construction of water conservancy, roads, railways, bridges and municipal engineering construction. The Nam Ou River cascade hydropower stations project in Laos is the project for which a Chinese company has the development right of the basin of an entire river overseas for the first time. It is also the first investment project implemented by PowerChina in executing its strategy of integrating the entire industry chain overseas by actively "going global" under the guidance of the "Belt and Road" initiative. The project consists of 7 cascade hydropower stations with a total installed capacity of 1.272 million kilowatts, average annual power generating capacity of 5 billion kilowatt- hours for years, and a total investment of USD2.733 billion. Level-2, level-5 and level-6 Hydropower Stations of the first phase have been completed and put into operation, and level-1, level-3, level-4 Power Construction Corporation of China and level-7 Hydropower Stations of the second phase were started to construct in April 2016 and all are expected to be completed and to start power generation in August 2020. As the key power source of the power grid for Northern Laos, since its operation started, the Nam Ou River cascade hydropower stations project has relieved local power shortage, and provided stable and reliable 安金经济高效 Acceptance rate of 100% Rated "excellent", accounting for 90% power support for local infrastructure improvement and industrial development. The Nam Ou River cascade hydropower stations still under construction will further facilitate Laos' infrastructure upgrade and transformation, boost the industrial development of surrounding areas, and create a large number of employment opportunities. Nam Ou River Level-2 Hydropower Station 运营项目 PROJECTS IN OPERATION 中国 CHINA 宁海警洱市糰扎波: 思茅港惠民小勤共 ** /** 孟糖 6诺关潢六级电站 NAM Ou 6 HPP 缅甸 MYANMAR 五级电站 NAM Ou 5 HPP ** 動態 A 香香 ** ASMR 二级电站 NAM Ou 2 HPP 万荣 # 帕市越南 VIETNAM Pohong LAOS ** am 纳案老挝南欧江流域梯级水电站项目(一期) Nam Ou River Basin Hydropower Project in Lao PDR 『普蓋包万象泰国 THAILAND 在建项目 PROJECTS UNDER CONSTRUCTION 七级电站 NAM Ou 7 HPP 四级电站 NAM Ou 4 HPP 三级电站 NAM Ou 3 HPP 一级电站 NAM Ou 1 HPP Plane position of Nam Ou River cascade hydropower stations (7 levels) "PowerChina is a central enterprise with a great tradition and capable of fighting tough battles. It is the spirit of the iron army that creates such an excellent team, which is a key enterprise in serving the 'Belt and Road' construction." -- Meng Jianmin, Vice Director of State-owned Assets Supervision and Administration Commission of the State Council "The Nam Ou River project plays a critical role in promoting local economic and social development. It has become a star project and important livelihood project in Northern Laos boasting significant influence and popularity, setting a good example for other external investment projects." --Zonse Siphandone, Deputy Prime Minister of Laos 老挝南欧江流域梯级水电站项目(二期) Nam Ou River Basin Hydropower Project in Lao PDR 17 Laos Sustainability Report

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