Mekong Utility Watch

Laos eager to build $1.2B dam

Associated Press
September 10, 1998

BANGKOK, Thailand (AP) – Laos is determined to become the battery of Southeast Asia through its $1.2 billion Nam Theun II hydroelectric dam, the country’s largest development project.

Hoping for an annual income of $250 million to help alleviate poverty, Laos is pushing
ahead with the dam, which critics say will destroy the environment and displace about
800 families.

A coalition of 14 environmental groups recently called on Thailand to forgo agreement
to purchase power from the dam, citing economic viability, as well as environmental
and humanitarian reasons.

The group said Thailand needed to reassess its power demand in light of the current
economic crisis, which has slowed industrial growth.

The NT2 Consortium, which is building the dam, dismissed the allegations, saying Laos
affected people will be adequately compensated and the Thai economy will be back on
track in about two years.

The consortium is looking to the World Bank to unlock loans from commercial lenders
by providing the controversial project a “political risk guarantee.”

“We expect to receive a final appraisal from the World Bank by next June and begin
construction by the end of next year,” said Khamleuang Sayarath, the Lao
government’s project director for the dam. “The bank has been with us every step of
the way and we are positive it will come through for us.”

The bank, however, has been tight-lipped, having been severely criticized in the past
for backing dams that have wrought environmental destruction.

Other dams are being planned or built in Laos, which has few other income-producing
resources. But the question of who will buy the electricity weighs heavily in Asia’s
economically depressed times.

“We are talking about a project that will begin generating electricity at the earliest in
2004. The situation should have improved by then,” said NTZ Consortium Director
Jean-Christophe Devallet. Besides Thailand, Laos hopes that one day Vietnam and
Cambodia will also be buying its electricity.

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