Claude Jeandron, Electricite de Frances (EDF) sustainable development and environment vice president said on Tuesday the financing for the controversial 1,25 billion US dollar Nam Theun 2 hydroelectric dam in Laos will be completed by the end of May, allowing construction to begin in June, the World Bank press review reports Wednesday.
Since its launch a decade ago, the project to build Nam theun 2 cleared its final hurdles over the last week when the Asian Development Bank and the World Bank agreed to back it to spur development in Laos.
– These decisions demonstrate the confidence that these financial institutions bestow on the Nam Theun 2 project and its essential contribution to sustainable development in Laos, said Jeandron.
EDF, the project leader and majority shareholder, and its partners two Thai firms and the Lao government, needed risk guarantees from the ADB and World Bank for the project in the secretive communist state before loans could be secured from commercial lenders.
The ADB and World Bank have respectively approved up to 120 million and 270 million dollar in loans and risk guarantees for the 1.070 megawatt project that will export 95 percent of its output to Thailand.
Jeandron said the partners of the Nam Theun Power Company (NTPC) were expected to finalize agreements with about 25 financial institutions, including French and Thai banks. Initial production tests on the dam were scheduled for 2008 with the start-up slated for the end of 2009.
EDF said about 180 million dollar or 13 percent of the project costs will be spent over the 25-year concession to protect the wildlife and improve the livelihood of about 75.000 people affected by the dam.
EDF said NTPC will set up and spend 1 million US dollar a year for 30 years to manage a 4.000 sq km wildlife reserve in the reservoirs basin. It will also compensate and relocate from the flooded area some 6,000 people, mainly hunters and small subsistence farmers, who will be resettled in villages with farms.
Downstream, NTPC will manage the rivers flow and reintroduce fish stock to the over-fished river, Jeandron said.
Thai News Service reports that environmental groups have predicted that the costs from the project will outweigh any benefits. Aviva Imhof, Southeast Asia program director for the environmental group International Rivers Network, questions whether the additional money will really reach the people it is supposed to benefit.
– We have not really seen any evidence that the Laos leadership has the commitment that benefits of large natural resource projects will go towards the entire nation, she said. But some other environmental groups have said they can support the project, provided independent agencies can ensure that the power company and the Laotian Government meet their pledges to improve people’s lives.
In a comment published in The Bangkok Post, Malee Traisawasdichai Lang, Phd candidate at the University of Aalborg, Denmark, writes that the bottom line is whether Nam Theun 2 will create poverty or eradicate it.
The experience of dams and resettlement in Thailand provides some useful indicators. Debt and new diseases such as malaria, sexually-transmitted diseases and stress have followed the construction of all dams.
As the impact of Nam Theun 2 unfolds in the years to come, debt and dam-induced disease, on top of the collapse of cultures, will become the benchmark contradicting the projects rhetoric of poverty alleviation, writes she.
She also argues that the consultations carried out did not enable the affected to think about their right to define how their resources should be used. Rather, it helped to move them to see sacrifice, rather than justice, as necessary.
It seduced the public into believing that the villagers and the Lao government, as an ally of the dam builders, are equal players in a country where freedom of expression is non-existent.
Meanwhile, high oil prices and rising global interest rates are clouding efforts by landlocked Laos to maintain robust economic growth and keep down inflation, Phouphet Khamphouvong, the central banks deputy governor, said. Phouphet said completion of the 1,25 billion dollar Nam Theun-2 hydroelectric dam project, scheduled for completion by 2009, would help improve the Lao economy substantially.
Electricity sales to neighboring Thailand, currently the third biggest export for the country after textiles and tourism, will become its top foreign exchange earner from 2010 when the 1.070 megawatt Nam Theun-2 project starts full power production, according to a recent report from the World Bank.
Le Monde (France) reports that the World Banks support of the Nam Theun 2 Dam is not only important for Laos. It also marks a turn in the policies of the institution, which is showing it is once again ready to support large dam projects in developing countries.
– We supported large infrastructures until the mid-90s, says James Wolfensohn, the president of the World Bank, adding: – Today, we have decided to do this again, and to provide loans of 1 to 2 billion a year.
The Bank considers that dams and large infrastructure often represent development opportunities. It is not indifferent to Chinas and India’s ambitions in the construction of such infrastructure.
These countries are now able to build for themselves, but the Bank would like to participate in order to give them a direction.
Kilde: www.worldbank.org
