Controversial US$1.4bil Laos mega-dam begins operation

  • Business
  • Wednesday, 17 Mar 2010

BANGKOK: A mega-dam in Laos criticized by environmental groups and financed in part by the World Bank has begun to generate electricity for sale to Thailand, its operators said Wednesday.

The Nam Theun 2 dam began commercial export of 1,000 megawatts of electricity on Monday, with some also sold to the domestic power supplier, the company said in a statement.

Laos has argued that the dam and more than a half dozen others on the planning boards will help lift the country out of poverty, but environmental groups have criticized the project for spurring illegal logging, incursions into a bio-diverse region and relocations of villagers.

Almost all the electricity from the dam will be sold to Thailand.

The US$1.45 billion project, the Nam Theun 2 Power Co., is co-owned by Electricite de France, the Lao government, the Electricity Generating Public Co. of Thailand and Italian-Thai Development.

The 1,439-foot (436-meter) -long dam, located about 150 miles (250 kilometers) east of the Lao capital, Vientiane, formed a 174-square mile (450-square kilometer) reservoir that has covered local villages. Critics say the resettled villagers have been left without a way to earn a living.

The company has a 25-year concession during which it is to pay the Lao government some $2 billion in royalties, dividends and taxes. After 25 years, the dam is to be fully owned by the government.

Laos plans to build more than half a dozen dams, most on tributaries of the Mekong River which has suffered record-low water flows in recent years.

These are blamed in part on massive mainstream dams built by China. - AP

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