Nam Theun 2

Nam Theun 2 dam site...then and now (Viriginia Hills & Clive Morris/Shannon Lawrence)

In 2005, the World Bank and the Asian Development Bank approved millions of dollars in guarantees and loans for the Nam Theun 2 Hydropower Project in central Laos. The $1.45 billion project is supposed to generate revenue for the Lao government through power exports to Thailand. Project proponents claim that Nam Theun 2 revenues will be used to help the poor. But in a country ranked as one of the 10 most corrupt by Transparency International, that is a high-risk bet - especially for the tens of thousands of Laotians bearing the project's social and environmental costs.

The Nam Theun 2 Power Company, led by Electricité de France, has nearly completed the dam's construction. Approximately 6,200 indigenous people living on the Nakai Plateau have been resettled to make way for the reservoir. More than 120,000 people downstream, who depend on the Xe Bang Fai and Nam Theun rivers for their livelihoods, are likely to experience the project's most serious impacts, including destruction of fisheries, flooding of riverbank gardens and water quality problems (see map).

World Bank and Asian Development Bank resettlement and disclosure policies have been violated, along with provisions of the Concession Agreement. Compensation payments and replacement land for villagers affected by construction activities have been inadequate, unfair or in some cases, non-existent. Plans to restore the livelihoods of villagers on the Nakai Plateau and along the Xe Bang Fai have yet to be clearly defined. The budget for the downstream program in particular is woefully inadequate, and impacts are just a year away.

International Rivers is closely monitoring implementation of Nam Theun 2 and is working to ensure that the developers, the World Bank and the Asian Development Bank uphold their commitments to affected people and the environment.

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