Mekong Utility Watch

Thai utility drops Nam Theun 2 hydro project but World Bank tries to keep it alive

Probe International Mekong Press Backgrounder #5

Lao PDR

March 6, 1997

Thai utility drops Nam Theun 2 hydro project but World Bank tries to keep it alive

The Electricity Generating Authority of Thailand has decided not to purchase power from the yet-to-be-built Nam Theun 2 dam in Laos until at least 2004, according to a report in the Bangkok daily, The Nation. The World Bank is still involved in the project, despite EGAT’s withdrawal, insisting it will not make a decision to finance the dam until the Lao government and the project’s private developers have completed environmental impact and resettlement studies. World Bank official Nina Shapiro, contacted last week, was unaware that the Nam Theun 2 power deal was in jeopardy.

The US$1.5-billion Nam Theun 2 project is being developed by a consortium including the government of Laos (25%), the world’s largest electrical utility Electricité de France (30%), construction company Transfield of Australia (10%), and Thai companies, Italian-Thai Development (15%), Phatra Thanakit (10%), and Jasmine International (10%).

Nam Theun 2 was to be a test case for the Bank’s new guarantee mechanism, which would guarantee commercial loans in countries ranked by the World Bank as uncreditworthy. EGAT cancelled plans to purchase electricity from the 680-megawatt dam because the World Bank was taking too long to reach a decision on whether or not to provide the guarantee. In addition, EGAT has discovered that it can buy cheaper power at home, now that it has opened its grid to private power producers.

The World Bank, meanwhile, continues to advise the developers of the dam on public relations, forced resettlement, and logging of the Nam Theun watershed.

Categories: Mekong Utility Watch

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