New Lao hydroproject signals new era for development

Nam Theun 2, the Lao People's Democratic Republic's largest hydropower facility, has been officially inaugurated. This signals a new era for growth, development and poverty reduction in the landlocked Southeast Asian country.

Over 90 per cent of the electricity generated by the project is being sold to Thailand, providing Lao PDR with a $2 billion revenue stream over the next 25 years.


The funds are earmarked for the nationwide improvement of health and education services, and other poverty alleviation programs.


"This project is a testament to the fact that when hydropower projects are done right, in a socially and environmentally responsible manner, the benefits are considerable," said Kunio Senga, Director General of ADB's Southeast Asia Department.



The project has also placed great emphasis on environmental management. Over $60 million has been invested in downstream water quality management, with better than expected results. It is also disbursing $1 million annually for the protection of the 4,000 square kilometer Nakai-Nam Theun Biodiversity Conservation Area and will release 35 times less greenhouse gases than a coal-fired power plant of equivalent size, and the biodiversity conservation area will help sequester an additional 40-60 million tons of CO2 emissions.


ADB provided $120 million in support of the $1.43 billion project. Twenty-seven different financing institutions supported the project, including the World Bank, the European Investment Bank, and Agence Francaise du Developpement.


The Nam Theun 2 Power Company is jointly owned by Electricite de France International, Electricity Generating Public Company (Thailand), and the Government of Lao PDR.