BANGKOK, (IPS) – The World Bank’s faith in the construction of large hydropower projects in the developing world appears undiminished as a fresh round of discussions to construct a mammoth dam in South-east Asia’s poorest country, Laos, gets underway.

But environmentalists are determined to undermine this drive by shedding light on the new dangers posed by the proposed Nam Theun Two (NTT) hydroelectric project.

The project is to be built by an international consortium of investors with the Bank stepping in as the political risk guarantor.

The new dam is a threat to the rapidly dwindling population of Asian elephants, environmentalists said this week in the Thai capital ahead of the first of many public seminars the Bank will host to examine the merits of the controversial hydropower project.

The Bank and the Manila-based Asian Development Bank will host the first consultation over the NTT, to be built at a cost of 1.3 billion U.S. dollars, on Aug. 31.

The Nakai Plateau, which will be inundated with water as the reservoir for the
NTT, is the home to South-east Asia’s and Laos’ largest concentration of elephants, the environmentalists add.

‘’The number of elephants on the Nakai Plateau is between 100 to 300. This is the highest number in South-east Asia,’’ Robert Steinmetz, a conservationist at the World Wildlife Fund (WWF), said at a press conference on Thursday.

‘’The role of the Nakai Plateau is essential to the elephants’ seasonal movements,’’ he added. ‘’The damage will be irreversible for one of the most important population of elephants in the region.’’ The Asian elephant population has dwindled to between 30,000 to 40,000 today, some 60 percent of which roam through India. Besides elephants, the 450 square-kilometre area of the Nakai Plateau forests that will go under water due to the reservoir will also affect other animals and birds, some of which are listed among the  world’s endangered species by the World Conservation Union (known by its initials IUCN).

They include the tiger, clouded leopard, nine species of turtle and tortise and gibbon
and birds such as the white-winged duck, green peafowl and hornbills, states Towards Ecological Recovery and Regional Alliance (TERRA), a Bangkok-based environmental lobby that monitors the Indochina region. For Surapon Dongkhae, secretary-general of the WWF Thailand, the consequence of the proposed dam in Laos ‘’will be worse than what we
experienced in Thailand with elephants’’. Thailand’s elephant population has already suffered with the construction of two large dams in Kanchanaburi, a province west of Bangkok, the construction of the Thai-Burma gas pipeline and development projects that created human-elephant conflicts in 10 areas of protected forests, activists say.

‘’Elephants cannot survive in any area of the forests,’’ he asserted.

The Bank has been quick to respond to this latest hurdle thrown in the path of the NTT, which is expected to generate 1,075 megawatts of power, making it the largest hydropower scheme in all of South-east Asia.

‘’The elephant issue – and ensuring their protection –is one of many which those involved in preparing and studying the project are dealing with,’’ declared a statement from the Bank this week.

The Nam Theun Power Co (NTPC), which is made up of the international consortium backing the project, is working with ‘’a leading conservation NGO (non-governmental organisation), World Conservation Society, on a protection programme (for the elephants),’’ the Bank states.

It involves ‘’direct observations of elephant families, tracking their daily lives, and working to move away from conjecture to the best science possible,’’ it adds.

The alarm over elephants adds to the long list of concerns environmentalists have if
the NTPC goes ahead with its plans to build the 50-metre high dam across the Theun River, which flows through landlocked Laos.

The hydropower scheme will displace close to 5,000 people living on the Nakai Plateau. Likewise, the change it would cause in the change in the flow of water in the Xe Bang Fai river would affect the livelihood and food security of between 50,000 to 120,000 people, according to TERRA.

‘’If built, the Nam Theun 2 project would divert 95 percent of the flow of the Nam Theun river through the project’s powerhouse and release this water into the Xe Bang Fai river basin,’’ states TERRA.

The Bank’s interest in large dam projects marks a shift – reflected in the provision of guarantees instead of direct funding – after a few years of going slow on such mega projects. Previously, environmentalists had criticised the Bank for backing projects that caused harm for the ecological and social harm.

Between the 1990-95 period, for instance, the Bank approved up to two billion U.S. dollars for 13 hydropower projects. But that number dropped to less than 600 million dollars for
only six projects from 1999-2002. Groups like the U.S.-based International Rivers  Network (IRN) have argued that the Bank cannot claim to have distanced itself from building large dams when its presence as the political risk guarantor – as in Nam Theun 2 — is the reason that attracts private and public investors.

Being a guarantor means offering security to the investors in case there are attempts by
the Lao government to nationalise this private sector development scheme.

The consortium to build the NTT was formed in 1995 with the aim of satisfying the voracious hunger for energy in neighbouring Thailand. Laos’ communist government has favoured the plans since it is counting on the returns from the sale of hydropower – also to the proposed South-east Asian regional power grid – to reduce the country’s dependence on foreign loans to eradicate poverty among its five million people.