The World Bank announced today that the Nam Theun 2 (NT2) Social and Environment Project closed on December 31, 2017 as scheduled. The project was financed through the World Bank’s concessional lending arm, the International Development Association, in support of the Government of Lao PDR’s overall NT2 Project. The overall project brought together 27 development partners and financiers, including the World Bank Group and the Asian Development Bank, to help the country develop a modern, environmentally and socially sustainable hydropower project that could generate power as well as opportunities for the people of the country.
Today, this public-private partnership supplies clean energy and generates revenues for the Lao government to invest in poverty reduction and environmental programs. In addition to revenues invested in education, health and other programs, the project has contributed to building national and local capacity and public policy for developing and implementing large-scale projects.
The World Bank recognizes the achievements of the overall project, and our contribution to these achievements. Since the start of commercial operations in 2010—on time and within budget—NT2 has consistently met or exceeded both its energy production and revenue generation targets. The government has also received revenues from dividends and taxes, 100 percent of which have been allocated to eligible expenditures including poverty reduction priority areas.
New sources of livelihoods have emerged for the resettled families on the Nakai Plateau. Incomes of 97 percent of households have reached the household income target—which is twice pre-project incomes. The remaining households continue to receive additional support. The average household consumption of resettled communities significantly exceeds the rural average, and households have greater resilience with increased savings and asset ownership.
In addition to new homes with bathrooms, toilets, electricity, and rainwater collection tanks, the project included the installation of water pumps and the construction of nursery schools, primary schools, two health centers and an upgraded district hospital. Today, about 90 percent of children aged five to nine attend schools, compared to 31 percent before resettlement. Child mortality has dropped to 50 per 1,000 from 120 per 1,000 before resettlement, and 90 percent of resettled children under five are now immunized.
Downstream of the powerhouse, the government has reinvigorated active support for livelihoods and erosion and fish monitoring. In the Nakai Nam-Theun Protected Area, leadership on conservation has been transferred to the Government of Lao PDR which has engaged a Consortium of Technical Experts, comprised of four NGOs, for technical assistance and expertise on protected area management. The area is slated to become one of Lao PDR’s first national parks.
To ensure that the benefits of NT2 continue and grow over the long term, support will continue in each of the project areas with funding from the Government of Lao PDR, Nam Theun 2 Power Company (NTPC), and Agence Française de Développement.
The World Bank is working with the Government of Lao PDR, NTPC, and other partners on the transition to ensure that NT2 continues to build on its accomplishments. This includes providing financial and technical support to many sectors that complement NT2’s progress, such as conservation, water resources management, forestry, public financial management, village development, energy, and other related areas.