World Bank backs controversial giant dam in Laos

[Nam theun II]

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WASHINGTON (AFX) - The World Bank has decided to support and guarantee the building of a 1.2 bln usd hydroelectric project in Laos after 10 years of deliberations on the controversial plan, officials said

The Washington-based bank's 24-member executive board gave the landmark decision despite warnings by environmental and other groups about the social and environmental risks associated with the 1,070-megawatt project

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It is the first major hydro power project approved by the bank in a decade and the first venture following a 2000 watershed report by the independent World Commission on Dams setting criteria for big energy and water projects

"We have spent the best part of a decade studying the project and evaluating the risks," said bank president James Wolfensohn, making probably his last major decision before handing over the helm to Paul Wolfowitz, the deputy US defence secretary

"Our decision, after a lot of deliberation, is that the risks can be managed, in fact, one major reason we are involved is to help manage those risks," Wolfensohn said

Known as the Nam Theun 2 hydroelectric project, it is the biggest single project undertaken in Laos, and expected to provide the poorest country in Asia with up to 150 mln usd in additional annual revenue, officials said

Most of the electricity generated would be sold to neighboring Thailand

Laotians on the average live on less than one dollar a day. The project is a joint venture between the Laos government and the Nam Theun 2 Power Company, spearheaded by EDFI, the global arm of French state-owned Electricite de France, which holds a 35 pct key stake

The Lao government and Thailand's Electricity Generating Public Co Ltd hold a 25 pct stake each while another 15 pct equity came from joint venture Italian-Thai Development Public Co. Ltd

The companies have said they will not proceed with the project if the World Bank does not put its stamp on it

Some 153 nongovernmental organisations from 42 countries had sent a petition to Wolfensohn urging the bank not to support the dam, which would flood an area the size of Singapore and involve the relocation of at least 6,200 people

The bank at its meeting yesterday approved a 50 mln usd partial risk guarantee, a 20 mln usd grant, and up to 200 mln usd in political risk guarantees in support of the hydroelectric project.

Source: futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1112320083-084a0f08-03002
Photo: 1. www.rwesa.org/image/lao_namtheun.gif
2. www.voanews.com/english/images/laos_dam_nam_thei_hydroelectric_site_poster_1apr05_eng_210.jpg

[LilP]

Finally, its approved. I'm glad and hopefully this will help pverty within the country or at least surround these regions.

[Eyime]

With 150 Mln USD annually, that's big money to make at a sacrifice of an area the size of Sigapore?! humm.. hope this works.

[ken]

We hope these money will distribute to the infrastructure developments , especially, education, health service and road networks. then 2020 goal is not far as actual time.