Nam Theun 2 - Resettlement of Project Affected People in Nakai Plateau Begins

May 29, 2006

May 29, 2006 – Over two hundred people gathered in Thakhek, Lao PDR for the first Annual Stakeholder Forum of the US$1.25 billion Nam Theun 2 Hydropower Project to discuss implementation accomplishments to date and challenges looking forward. The one-day forum, held May 17, was followed by a visit to the project site on May 18 by over 100 people from government, development agencies, media, and civil society. The project, a cornerstone of poverty reduction for the country, is under its first year of implementation and progressing well, the Government of Lao PDR announced.

"This project is a national priority," said H.E Mr. Onneua Phommachanh, Minister of Industry and Handicraft. "We believe Nam Theun 2 has the potential to improve the lives of the Lao people and help our country exit the Least Developed Country (LDC) status by 2020 through promoting growth, development, and poverty reduction initiatives," he said.

Mr. Bernard Tribollet, CEO of the Nam Theun 2 Power Company (NTPC), which is the private sector company currently implementing the project in partnership with the Government of Lao PDR, updated the Forum participants: "Villagers – all of whom have been living below the poverty line – are now moving to their new sites, as part of the project’s resettlement program, living in temporary housing while their new houses are being constructed with their involvement, and starting to work on their agricultural plots . These new sites, facilities, and housing are all based on extensive consultations which have taken place over the past few years and have been designed taking into account the views of the villagers. Land has been cleared, domestic water supply and sanitation is being provided, roads built to increase access, and villagers will be able to begin some of their livelihood activities such as farming and raising of livestock including pigs and poultry."

Mr. Kaeng, a villager in Ban Sopon, when during the site visit was asked if he liked his new village and home currently under construction, commented, "Yes, I know it will be my final home and that the village will have good infrastructure. Currently there is a road and good water supply and we will be getting electricity too. I have my own agricultural field nearby so I can already start planting." Other villagers noted that they had been waiting such a long time to be moved so were relieved to finally begin to build their new lives.

More than 200 families from four villages have already moved into the new sites, to benefit from improved living conditions – temporary housing with watertight roof and toilets, community wells, small vegetable plots, access roads, food support, health programs, schools and nurseries – and others will move in the coming weeks.

This approach has been endorsed by external monitors, including most recently the  Panel of Environmental and Social Experts (POE), who advise the Government of Lao PDR on project implementation. Additionally, 54 affected urban households in Oudomsouk town have all been relocated to new homes,  and are rapidly settling down and going about their life.

World Bank Country Manager for Lao PDR, Mr. Patchamuthu Illangovan, updated the Forum on  the World Bank’s latest assessment of the project -- noting concerns over implementation of the social and environmental programs that were designed to ensure that negative impacts of the project’s construction on the people or the environment are adequately addressed. He welcomed recent actions taken by the project developers, highlighting the accelerated program of resettlement of villagers on the Plateau, which the World Bank had identified in its March 2006 Annual Progress report as having lagged behind schedule. "Given the size and complexity of the project, we need to be realistic - there will be problems and delays. This just makes monitoring and quick response absolutely essential throughout the implementation phase to ensure that the project helps the people of Lao PDR. We are pleased to see the responsiveness by Goverment and our private sector partners with respect to some of the earlier concerns and will continue to work with them to ensure the project meets its development goals."  He continued, "The World Bank sees the Nam Theun 2 project not 'just' as an investment in power generation, but rather more broadly as a development project that will generate revenues (US$2 billion between 2009 and 2034) for increased investments in health, education, rural development, and other priority programs, and will strengthen the country's capacity to develop its hydropower resources in a socially and environmentally sustainable way."

The Nam Theun 2 project will have significant economic, environmental and social benefits. These include:

  • improving the living standards of the 6,200 resettled people--doubling their household incomes to nearly US$820 per year;
  • enhancing livelihood opportunities for over 60,000 people living in the downstream areas of Xe Bang Fai and Nam Theun Rivers; and
  • protecting the 4,000 sq. km. Nakai Nam Theun National Protected Area, a unique biodiversity area;

In addition, the project will generate much-needed revenue over the long term for poverty reduction efforts. Parallel activities complementing the project will also:

  • strengthen the country's public finance management system so that it can better target and account for moneys earned from not only NT2 but also other hydropower and mining projects; and
  • build the country's capacity in managing environmental and social issues associated with infrastructure development and biodiversity conservation at the national and local levels, through improved human resources development, better functioning institutions and sound policies.