Lao PDR: Statement by the World Bank on recent comments about Nam Theun II operation

March 24, 2010

Vientiane, March 24, 2010 — The World Bank would like to note the following in response to a recent press statement entitled “Laos’ Nam Theun 2 Dam Operation Illegal”.

The current operation of the Nam Theun 2 Hydropower Project is legal and consistent with the project’s legal agreements and operating plans.  The start of electricity generation has two immediate outcomes. First, it enhances the project’s social and environmental benefits to the affected people. Second, revenues generated will be used by the Government for pro-poor programs in education, health, and rural development, as well as for environmental protection.

The World Bank, as well as other International Financial Institutions and oversight agencies, have been encouraging progress towards drawdown of the reservoir by using the water for electricity generation. This will help resettlers to build their livelihoods through irrigation and improved land-use planning around the drawdown zone of the reservoir.

The community irrigation systems for the resettled people on the plateau are installed in a number of villages and the balance will be completed in the coming months.  These irrigation systems are based on tube wells adjacent to the reservoir.  The tube wells cannot be completed until there is a significant drawdown of the water in the reservoir. With the larger four turbines now operating, the drawdown is underway, allowing the irrigation systems to be completed.  The current approach incorporates lessons from the pilot program in a resettled community.

In the downstream areas, a comprehensive compensation and mitigation program designed in 2005 has been under implementation for several years in anticipation of project impacts, and many downstream people are already benefiting from this program on both the Nam Theun and Xe Bang Fai rivers. Every riparian community is being supported through extensive information and awareness campaigns about project impacts (such as erosion, water quality and river bank gardens) and the benefits people are receiving.

The Project has in place robust monitoring and oversight arrangements through which project impacts and progress are being tracked. The project’s environmental and social commitments continue over a longer time frame, some for the full 25-year concession period.  Early progress is promising. The results from socio-economic monitoring show that resettled people are making good progress in building their new livelihoods.  Project partners remain committed to managing the risks and challenges ahead in building sustainable livelihoods for project affected people.

Nam Theun 2 is an important development endeavor in Lao PDR’s long-term ambitions. Over the next 25 years, the NT2 Project will generate nearly $2 billion in revenue for pro-poor and environment programs across the country. Within the NT2 area, the project also aims to sustainably improve the lives of thousands of project impacted people, as well as protect the NT2 Watershed.




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