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Laos taps its key resources
Viewpoint
Thursday May 28th 2009
Le Monde's Jean-Michel Bezat explains how hydroelectric power is to drive development and pay for social projects in Laos. Despite their involvement in the project, NGOs are still hostile
Thursday May 28th 2009
The banks of the Mekong reflected in the water as a boat heads up the river. Photograph: Barbara Walton/EPA
A French engineer wrote an enthusiastic account in 1927 of the hydroelectric potential of the Nam Theun river in Laos, a major tributary of the Mekong river, on the Nakai -plateau. Now his dream is about to come true. The dam, built with the support of the World Bank, will start to produce electricity at the end of this year.
The project should yield $2bn in revenue -between now and 2035, when the Nam Theun Power Company (NTPC) is due to hand over the facility. “The first time I visited the site was in 1984,” says Soulivong Dara-vong, minister of -energy and mining, gazing at the station’s pagoda-shaped roof. “For me it marks the completion of 25 years’ work.”
In the 1980s there was no road through to the Mekong river and -local people had to survive on what they could hunt or gather after they had consumed the annual rice crop, grown on land cleared by savage defores-ta-tion. “NT2 [Nam Theun 2] is essential to root out poverty,” says Daravong.
Laos, which is among the world’s least developed countries, has few resour-ces. But it has plenty of water, so there are plans in Vientiane, the capital, for it to become south-east Asia’s powerhouse.
NT2, built by the power utility EDF, is the largest foreign investment ever made in the country. “It’s a $1.5bn construction project involving 70 million man-hours, with a workforce of 9,000 at its peak, 80% of whom were from Laos,” said Jean-Christophe Philbe, head of EDF in south-east Asia.
EDF spent $100m mitigating the impact on communities and the environment, often seriously damaged by previous schemes.
Yielding to pressure from NGOs, the World Bank stopped building dams in the 1990s because the social degradation outweighed economic benefits. But in 2005 it gave NT2 the go-ahead in exchange for a commitment by the backers that local people would gain from the project.
The dam’s construction will displace the -Nakai plateau’s 6,200 people, and 80,000 more will be affected by the discharge of water downstream. In return the power company aims to double the annual income of families by 2013, raising earnings to $800. “We did not want to pay compensation to the 6,200 displaced persons but rather give them the means to develop new livelihoods,” says Philbe. EDF has bought fishing boats and built a sawmill. It has also allocated each household a plot of land, and set up a microcredit system to encourage trade.
Sop On is one of 15 villages rebuilt on the banks of the reservoir, with houses built on piles in rows along dusty streets replacing the traditional bamboo huts. All the homes have mains electricity and many have stuck a large parabolic antenna in the middle of the yard.
Khamsi, the local representative of the Lao Women’s Union, is convinced things are better. “I’ve increased my income and my life has certainly -improved,” she said. “Nothing in the world would make me go back to my old way of life.” Only about 60 families had failed to adapt, she said.
NT2 should also drive development in Laos, under World Bank supervision. The bank demanded that the state invest the $80m annual revenue from electricity sales (95% of which will go to Thailand) in the economy and social projects. This will boost gross domestic product by 6%, with substantially more to come. Annual revenue will rise to $250m when ownership of the facility passes into state hands in 2035.
“By helping to make this possible we have contributed to the global -development of hydropower,” says Jean-François Astolfi, head of the New Energies division at EDF. “Here World Bank policy is in step with national policy,” says Daravong.
But despite their involvement in the project, NGOs are still hostile. They remain concerned about the deteriorating quality of water in the reservoir, about how well local communities will adapt, and whether the government will successfully manage the facility when EDF leaves.
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