World Bank Group Welcomes Strategic Environmental Assessment of Mekong Mainstream Dams

October 22, 2010

Confirms that it will not finance investments in mainstream hydro projects


Washington DC, October 22, 2010 — In the wake of the release of the Strategic Environmental Assessment (SEA) of proposed hydropower projects on the Mekong River’s mainstream, the World Bank today reaffirmed its commitment to helping the 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 SEA was undertaken for the Mekong River Commission (MRC)[1] by an expert consultant team which spent more than a year assessing the potential impacts of the  proposed hydropower projects on the Lao, LaoThai and Cambodian reaches of the Mekong River’s mainstream.

The SEA consultant team recommends a 10-year deferral for mainstream hydropower development, saying its decision was prompted by uncertainties about the scale and irreversibility of risks in such a complex river system. The SEA says decisions on mainstream dams should be deferred for a period of up to ten years, with reviews made every three years, to ensure the necessary conditions to strengthen understanding of the natural systems as well as management and regulatory processes are conducted effectively.

“This report offers an important new body of information on the Mekong and the potential impacts of these projects on the river’s mainstream,” said Annette Dixon, the World Bank’s Country Director for South East Asia.

“Our experience in working with the countries of the Mekong is that hydropower can play an important role in development if it is managed carefully for the maximum benefit of the people and the environment,” she said.  

“In Laos, where we have worked with the Government on Nam Theun 2—a tributary-based hydro project—since the mid-1990s, local people are seeing their  livelihoods and the health of the children improved, as well as better access  to services like roads, schools and clinics. The project is also contributing to the conservation of the surrounding Nakai-Nam Theun national protected area—a vast zone of globally significant biodiversity.

“Revenues from the project, through the sale of electricity to neighboring Thailand, are now flowing into the country and contributing significantly to poverty reduction programs. Our engagement with Laos for the past 15 years has helped build the country’s capacity to manage the policy environment around hydropower and support the implementation of stringent social and environmental standards.

“For its part, the World Bank Group has no plan to invest in hydro projects on the mainstream of the Mekong. We will continue to help strengthen countries’ capacity to identify and manage tributary projects that can be developed in a responsible and sustainable manner. 

“We look forward to the MRC’s forthcoming River Basin Development Plan, which will articulate the organization’s views on the optimal development of the Mekong river basin.”

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[1] The Mekong River Commission (MRC) is an intergovernmental river basin organization that provides the institutional framework to implement the 1995 Mekong Agreement. The Governments of Cambodia, Lao PDR, Thailand and Viet Nam signed the Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin. They agreed on joint management of their shared water resources by cooperating in a constructive and mutually beneficial manner for sustainable development, utilization, conservation and management of the Mekong River Basin water and related resources.