Hydropower dam in Laos would alter two rivers

Posted: 22 October 2004

A proposed $1.3 billion dam and hydroelectric power project appears to the government of Laos as a way to earn income by selling power to Thailand. Critics say the ecology of two major river systems in Laos will be altered if the Nam Theun 2 Hydroelectric Power Project is built, crucial documents have not been made public, and the people who would be affected by the dam have never been consulted.

The Nam Theun 2 Hydropower Project involves construction of a 50 metre (162 foot) high dam on the Theun River, a major tributary of the Mekong. Water would be stored in a reservoir on the Nakai Plateau and diverted to a powerhouse, before being released into another Mekong tributary, the Xe Bang Fai.

One dam already exists on the Theun River, upstream of the proposed Nam Theun 2 project. (Photo courtesy Statkraft SF)
One dam already exists on the Theun River, upstream of the proposed Nam Theun 2 project. (Photo courtesy Statkraft SF)
One dam already exists on the Theun River, upstream of the proposed Nam Theun 2 project.(Photo courtesy Statkraft SF)
On behalf of the Communist government of Laos, the World Bank, in partnership with the Asian Development Bank, organized a series of workshops on Nam Theun 2 as part of its effort "to engage more directly with international stakeholders," the Bank says.

The workshops in Bangkok, Tokyo, Paris and Washington over the past two weeks were sponsored by the World Bank, which says it is trying to decide whether or not to provide funding for the project.

Ian Porter, the World Bank's country director for the Lao Peoples Democratic Republic said the workshops are the latest step in what has been "an unprecedented process of research, consultation, and disclosure of information on a single project," for the Bank.

"The intensity of this effort reflects our strong desire to ensure that the proposed project would deliver real, durable benefits for the people of Laos," said Porter. "That is the only basis on which we would support it."

Tackling poverty

At the Bangkok and Tokyo workshops Dr Somboune Manolom, permanent secretary of the Loatian Ministry of Industry and Handicrafts built the case for why Nam Theun 2 is needed.

He said that 70 per cent of the Lao people live on less than $2 a day; 40 per cent of villages practice slash-and-burn agriculture; 70 per cent of the labor force has no education or did not finish primary school; 40 per cent of children are malnourished and one in 10 will die before the age of five; half the population does not have access to clean water."

"One in four adults will die by age 40 and average life expectancy is 59 years," Manolom said.

"These are sobering statistics," he said. "While many of these indicators are improving, much remains to be done, which is why rural development and poverty reduction programs are so important to my government. Nam Theun 2 has the potential to deliver a significant and predictable stream of revenue that would have a very clear positive impact on national development."

But civil society organizations have "no confidence that the Nam Theun 2 project will deliver its promised benefits or that the project's risks can be managed," said the International Rivers Network (IRN). "The World Bank should not support the Nam Theun 2 project," the group said.

Threatened livelihoods

The California based dam watchdog organization says the Nam Theun project would displace about 5,700 indigenous people living on the Nakai Plateau who would be evicted to make way for the Nam Theun 2 Dam and its reservoir.

Fishing in the Xe Bang Fai River(Photo courtesy Nam Theun 2 Hydroelectric Project)
Fishing in the Xe Bang Fai River(Photo courtesy Nam Theun 2 Hydroelectric Project)
Fishing in the Xe Bang Fai River(Photo courtesy Nam Theun 2 Hydroelectric Project)
Another 150,000 people depend on the Xe Bang Fai River for their livelihoods. The IRN says they would suffer from destruction of fisheries, flooding of riverbank gardens and other impacts. "These people have never been consulted, let alone given their consent or agreement to the project," the IRN says.

The project is being developed by Electricité de France and two Thai companies in co-operation with the Laos government and will generate foreign exchange for Laos by selling the power to Thailand. The World Bank and other potential donors claim that the revenues will be used for poverty alleviation activities, but critics are skeptical based on the Lao government's track record.

Generating electricity

Nam Theun 2 would enable Laos to export 995 MW of electricity generating capacity and electrical energy to the Electricity Generating Authority of Thailand.

The hydroelectric power project would also supply 75 MW of electricity to Electricité du Laos for domestic use.

The project is expected to generate annual revenues of US$13 million in the first year of operation with annual revenue growing to about US$150 million by the year 2033, the Bank says. "If the revenues are spent efficiently, accountably, and transparently, NT2 could provide significant, incremental support to Lao PDR's poverty reduction and biodiversity conservation efforts."

But the conservation groups say the hydropower project, located in and adjacent to one of the largest remaining tropical forests in mainland Southeast Asia, will have adverse impacts on biodiversity.

This is a slightly shortened version of an article which first appeared on the website of Environment News Service. All rights reserved.

Related link:

Nam Theun 2 Central Headquarters