#10 July 28, 1998 : Power Company Off the Hook for Damaging Fisheries in Lao PDR

# 9 April 6, 1998 : New Hydro Dam Threatens to Drown Lao Government in Debt, Experts Warn

# 8 November 20, 1997 : Privatization of Thailand’s Power Sector Squashes Competition, Protects Private Sector Cronies

#7 October 2, 1997 : Military Logging Company Expects World Bank Funds to Police Forests and Forcibly Resettle Ethnic Communities

#6 June 3, 1997 : World Bank Approves Guarantee Mechanism to Protect Private Deals With Risky Third World Governments

#5 March 6, 1997 : Lao PDR, Thai utility drops Nam Theun 2 hydro project but World Bank tries to keep it alive

Mekong Backgrounder #10

July 28, 1998

Power Company Off the Hook for Damaging Fisheries in Lao PDR Government or Foreign Aid Should Pay for Restoration, ADB Says

The Lao government or foreign aid agencies should pay for restoring fisheries damaged by the Theun-Hinboun hydro dam, not the power company that owns and operates it, according to the project’s lead financier, the Asian Development Bank (ADB).

Responding to criticisms of the Theun-Hinboun dam, the ADB released a report last month warning that efforts to force the Theun Hinboun Power Company to pay additional costs would damage the confidence of foreign lenders and investors in Lao PDR.

In particular, the ADB is responding to a report by independent researcher, Bruce Shoemaker, which documents villagers’ claims that fish catches upstream and downstream of the dam have declined by as much as 90 percent, and concludes that the Theun Hinboun Power Company should compensate affected villagers. The ADB claims that “no emergency situation could be found anywhere in the entire area” and that mitigation will be provided in the form of a fisheries management program. Funding for a fisheries program should come from government royalties from the dam or from foreign aid agencies, the ADB says, because the program will serve as a “pilot project” for future hydropower projects.

But, no funds appear to be available for implementing the fisheries program even though documents prepared for the $60 million ADB loan in 1994 stated that a $195,000 program was “scheduled to commence as soon as the project is approved.”

In any case, the fisheries management program would have attempted to restore fish stocks upstream of the dam only. Meanwhile the dam has cut off flow and decimated fish stocks downstream. Ironically, the downstream area was officially declared a protected area in 1993, as part of a government program supported by the World Conservation Union, to conserve wildlife and fisheries.

The Theun-Hinboun Power Company, 60 percent of which is owned by the Lao government, 20 percent by Nordic utilities, and 20 percent by a Thai real estate developer, expects to earn about US$70 million annually from electricity exports to Thailand. Completed in April 1998, the $260 million project was financed by the Asian Development Bank, export credit agencies in Norway and Sweden, and a consortium of Thai commercial banks.

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For a copy of the ADB’s report on the Theun-Hinboun hydropower project, contact Julian Payne, Executive Director for Canada, Denmark, Finland, the Netherlands, Norway and Sweden, Asian Development Bank, Manila, Philippines, Fax 632 636 2048/2049

“Trouble on the Theun-Hinboun,” by Bruce Shoemaker (Berkeley: International Rivers Network, April 1998) is available at Mekong/theun98.htm [PDFver here]