VIENTIANE, July 28, 2009 – Senior policy makers and technical specialists from the Republic of Tajikistan travelled to Laos in mid-July 2009, and spent a week with their Lao counterparts to learn about implementation experience of the Nam Theun 2 (NT2) Project. This exchange was facilitated by the World Bank’s South-South Experience Exchange Facility (SSEEF) that was established in September 2008 with the objective of promoting knowledge sharing among and between developing countries.
The largest development project in the country, the $1.5 billion Nam Theun 2 is a 1070 Megawatt hydropower project in central Laos. During the 25-year concession period, the project will generate nearly $2 billion in revenues that the Lao Government will use for pro-poor and environmental protection programs. NT2 has catalyzed numerous country-level reforms, covering investment climate, public-private partnership in natural resources use, public financial management, transparency and accountability, and environmental and social sustainability.
Like Laos, Tajikistan was once a centrally planned economy, and both have similar geographical features. The reforms and lessons from Laos, especially on the integrated approach to sustainable hydropower development, and the NT2 project’s environmental, social and engineering performance, were the focus of the Tajiks during their visit to Laos. Tajikistan is planning to expand its hydropower program.
Ms. Ngozi Okonjo-Iweala, Managing Director expressed her strong support for this activity under the new South-South Experience Exchange Facility. Ms. Ngozi Okonjo-Iweala, Managing Director, expressed her strong support for this activity under the new South-South Experience Exchange Facility. “Countries learn best by seeing how others have tackled similar issues. Through the Facility, we want our clients to benefit first-hand from the experiences of other developing countries,” she said. “The visit of the Tajik delegation constitutes a great opportunity to learn how Lao PDR catalyzed foreign investment to finance its large Nam Theun 2 hydro export project and how the project is integrated into its development strategy for sustainable growth and poverty reduction."
This Experience Exchange was structured around three broad learning themes.
The first area of focus was on the political commitment and policy underpinnings needed to get the country ready for a complex project like Nam Theun 2. There was a frank and open discussion at the ministerial level, where Lao Energy, Finance and Environment ministers spoke candidly about the difficulties, challenges and risks of developing and implementing a complex project like Nam Theun 2. The discussions focused on the range of reforms that Laos undertook to stabilize macro economy, revise appropriate laws and regulations, improve transparency and accountability in using project revenues, build capacity of institutions and individuals, involve local people in project development, and integrate environmental and social considerations in economic and engineering plans.
Minister Soulivong Daravong, the Minister of Energy and Mines for Laos said: “At the outset we realized that we needed international private capital to develop this project, and for that to happen we needed to undertake significant reforms. It was difficult, but looking back, we are proud of what we have achieved, and delighted that Tajikistan Government representatives have chosen to come here to discuss our experience.”
The second area was the understanding building blocks needed to make the project deliver sustainable outcomes. Tajik delegates showed considerable interest in the details from the Nam Theun 2 Power Company, Government technical staff and Electricity Generating Authority of Thailand, particularly on legal architecture, financing structure, engineering design, environmental and social features, riparian management, contractor performance and oversight approaches, and dispute resolution.
The third area was the visit. The Tajik delegation visited Nakai to see first-hand the project that has a footprint of nearly one million hectares. This gave them an opportunity to learn about on-the-ground realities. The delegation spoke directly with villagers about the social process that was employed to hear their voices, and how they feel about the project’s impacts and mitigation. They showed keen interest to learn about livelihood support, compensation payments, and community infrastructure and services.
Before leaving Vientiane, the Tajik delegation met with the Deputy Prime Minister, Ministers of Finance, and Water Resources and Environment to share their experiences and perceptions, and highlight the lessons that they are taking away.
After calling on the Deputy Prime Minister Mr. Asang Laoly, Mr. Negmatjon Buriev Senior Advisor on Economic Policy to the President of Tajikistan and the Head of Delegation said: “The Government of Laos should be complimented for its commitment and determination to make the Nam Theun 2 project a success, especially by attracting substantial private investment for the benefit of the country as a whole in its goal of eliminating poverty and sustaining high levels of economic growth. We observed several useful lessons that we could draw from Laos’s experience, which will be useful in the way we develop our hydropower program in Tajikistan. I would like to highlight the successful role played by the World Bank in the NT2 Project, and we compliment the World Bank for facilitating this exchange between my country and Laos. I look forward to further cooperation between our two countries”.