Laos had earlier assured the country its two hydroelectric plants in Nam Theun would be
operational by 2006. But the governor of the Electricity Generating Authority of Thailand, Sitiporn Rattanopat, told Business Day, he wasn’t sure if the transmission lines from Laos to Thailand would be ready by then. Also, certain points in the longterm power purchase
agreement have yet to be sorted out before Thailand finally signs it, Sitiporn said. The US$1.3 billion power generation project, seen as a big boost to the economy of poverty-stricken Laos, has yet to get crucial risk guarantee endorsement from the World Bank. Financing for the project hinges on this World Bank guarantee. A consortium led by
Electricite de France is tasked with building the project and operating it for 25 years before turning it over to the Lao government. Two Thai companies – the state-owned Electricity Generating Public Company and Italian-Thai Development Public Company – are two other members of the consortium. Several international non-governmental organisations (NGOs) are opposed to the project claiming it would ruin the environment and saddle Laos with debts it cannot afford to pay. The World Bank, however, has yet to decide on the guarantee. Ian Porter, the World Bank’s country director for Laos, said the project “is potentially an important opportunity for Laos to obtain revenues to reduce poverty and
improve environmental protection.” But first, he added, Laos has to commit to important reforms in public finance management, power and forestry reforms “to give the bank and others confidence that the proposed project could deliver sustained economic benefits for the poor.” In a statement to Business Day, Porter said World Bank “support would be contingent on three factors: that the project is embedded in a development framework, characterized by concrete performance, that aims at poverty reduction and environmental protection, that properly designed environmental and social safeguards are re-established along with the capacity in place to implement them as well as assurances of the project’s economic and financial viability, and that there is understanding and support by the international donor community and global and local civil society for the country’s development framework and the project.”