NT2 is an example of how hydropower can help support development in an economically, environmentally and socially sustainable way, and the Lao Government should look for ways to apply lessons learned from NT2 to other hydropower projects in the country. Lessons should include how Governments, private developers and the World Bank can work together to achieve similar quality results, but more simply and efficiently.
NT2 required the resettlement of around 6,300 people in 15 villages on the Nakai Plateau in Khammoune Province in Lao PDR. The project’s commitment to resettled communities extends beyond compensating them for the move, and includes helping villagers to develop better livelihoods and living standards than they had before the project.
Currently NT2 is roughly half way through the livelihood development process, but analysis of several rounds of socio-economic monitoring shows that people believe that they are better off following resettlement. 87% of resettlers feel their lives have improved. School enrollment rates in the resettlement areas among children 5-9 years old went from 31% in 1998 to almost 90% in 2009. This means about 700 children who otherwise likely would have missed out on education altogether are now going to school.
Concern for and protection of the NT2 Watershed is one of a key project priorities. Nakai Nam Theun National Protected Area is the largest protected area in Lao PDR and one of the most important areas for biodiversity in Southeast Asia. The commitment to protect this conservation area, nearly seven times the size of Singapore, was an important step for NT2 approval. The main work is being done around ensuring the long term protection of the biodiversity and watershed values of the Nakai Nam Theun National Protected areas, while at the same time safeguarding the well-being, traditional livelihoods and culture of the people who live there.
While NT2 has already achieved impressive results, there is still much to be done, especially ensuring sustainability of improved livelihoods on the Plateau, strengthening watershed protection and enforcement, and establishing stronger regulatory structures. The World Bank will stay closely involved with the Government and Nam Theun 2 Power Company in the implementation of the project in the coming years.
The World Bank is determined to deliver sustained poverty reduction and development benefits in the long term. This includes implementation of the full set of environmental and social programs. The World Bank and ADB working closely with the Government, NTPC and communities to ensure that project obligations are met and that people in the project area continue to benefit from NT2.
Revenues from electricity sales to Thailand have amounted to around USD $5.6 million during the last Lao financial year and are projected to be at around USD $10 million for the coming financial year. They will average around USD $80 million per annum over the 25 year concession period. So far, approximately USD $2 million has been channeled into spending on education in poor districts; USD $1.7 million has been spent on rural roads; USD $1 million has been spent on public health projects; with the remainder of the funds being used for rural electrification and environmental protection. The World Bank is working closely with Government on this program as part of a broader public financial management strengthening program.
Our engagement in hydropower and hydraulic infrastructure is an integral part of the World Bank’s approach to development, all the more so in a world with 1.5 billion people lacking access to electricity and one where the impact of climate change is increasingly being felt. Done well, hydropower offers clean, affordable and reliable electricity access to help drive economic growth, poverty reduction, and sustainable development.
The World Bank is committed to helping countries of the lower Mekong Basin to manage hydropower for the maximum benefit of people and the environment. At the same time the World Bank confirmed it will not finance and has no plans to invest in hydro projects on the mainstream of the Mekong. The World Bank supports recommendations outlined in the Strategic Environmental Assessment (SEA) undertaken for the Mekong River Commission by an expert consultant team. This report offers an important new body of information on the Mekong and the potential impacts of these projects on the river’s mainstream.
The World Bank will continue work on strengthening countries’ capacity to identify and manage tributary projects that can be developed in a responsible and sustainable manner. World Bank remains determined to help partners to deliver long term and sustainable poverty reduction and development benefits.
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