Construction has begun on the 450 KW Nhot Ou Hydropower Plant which aims to spur development in the geographically advantageous Phongsaly province bordering China and Vietnam, according to state-run daily Vientiane Times, Thursday. The plant is located in the remote northern province of Phongsaly, nestled between China's Yunnan province and Vietnam's Dien Bien Province. The plant is expected to supply 3 million kwh of electricity a year. On Monday Prime Minister Thongsing Thammavong paid a working visit to Phongsaly, calling on provincial authorities to increase commercial production. The Prime Minister also instructed authorities to identify the causes of local poverty so increased employment could be achieved in the province. During the trip the Prime Minister emphasized the importance of Phongsaly's geographic location, commenting that the advantage would facilitate the province's access to trade and investment with China and Vietnam. The Japanese government provided 17 million U.S. dollars in aid to Laos for the construction of the plant. The grant signing ceremony between the Lao and Japanese government was held on March 29 of 2013. Japanese firms TESPESO and HASAMA have been appointed as project consultants and project contractors respectively. Construction of the plant including construction of the associated power grid is expected to take 16 months to complete. According to Renewable Energy Institute Director General Hatsady Sisoulath, who was present at the ground-breaking ceremony, the plant will supply reliable electricity for the 658 families in Phongsaly's Nhot Ou district. According to Hatsady, the Ministry of Energy and Mines resolved to expand electricity in the region so as to drive socio-economic development. The energy will boost their productivity, generate more income and reduce poverty in accordance with government policy, he said. According to local media the project will enable the province to save 270,000 U.S. dollars annually on the cost of foreign electricity Only 43 percent of households in Phongsaly province currently have access to electricity. The Lao government plans to increase that number to 90 percent. Nationwide approximately 85 percent of households have access to electricity.