Friday, December 10, 2010

New Laos Dam Test for Hydropower Projects (WSJ Dec 9, 2010)

New Laos Dam Test for Hydropower Projects

Wall Street Journal, 09 Dec 2010

NAKAI TAI, Laos�One of Asia's poorest countries officially inaugurated
a $1.3 billion hydroelectric dam Thursday that is earning badly needed
revenue and could set new global standards for limiting environmental
damage and improving the lives of those displaced.

The dam in central Laos was the first major hydroelectric project
supported by the World Bank after a long hiatus in the face of
criticism that dams harm communities and the environment.

Activists warned that it's too early to call the project a success,
noting questions remain about the dam's impact on water quality and
fisheries and whether the resettled will be able to support themselves

The prime minister of neighboring Thailand�which will buy 95% of the
dam's electricity�joined Laotian leaders and international officials
in unveiling a marker at the site.

The dam, which has been operating since April, is expected to bring in
$2 billion over the next 25 years, money the government has pledged to
spend on reducing poverty in this landlocked nation with few resources
besides its mountains and rivers.

The World Bank estimates the project will account for almost 40% of
Laos's economic growth this year.

"The idea of the Laotian government is to become the 'battery' of
Southeast Asia, because they've got tremendous hydropower potential,
so what we're trying to emphasize is, please take the model and the
lessons," World Bank President Robert Zoellick said after a visit to
the project with The Associated Press in October.

He said that hydropower, done right, has great potential as a clean-
energy source, and that the World Bank is considering further projects
in Laos.

Between 1950 and the 1980s, some 35,000 large dams were built around
the world, extolled as engines of economic development and a renewable
energy source that doesn't require polluting fossil fuels.

But a 12-member commission, set up by the World Bank and the World
Conservation Union, issued a highly critical report in 2000, pointing
out the downsides: 40 million to 80 million people displaced, an
irreversible loss of aquatic life and the flooding of acres of forest
and wetlands.

The commission set criteria for future projects, but its guidelines
have not always been followed.

The new Laotian dam, called Nam Theun 2, holds back a 450-square
kilometer reservoir on a tributary of the Mekong River. Six giant
turbines pump out 1,070 megawatts of electricity.

The government and its foreign partners�power companies EDF from
France and EGCO from Thailand�say social and environmental concerns
are as central to the project as turbines and power lines.

"It's a unique opportunity to set a new standard and to say that today
a hydroelectric project has to take this new approach on board," EDF's
regional director, Jean-Christophe Philbe, said.

A 4,100-square kilometer protected area has been established to
safeguard flora and fauna.

Seventeen villages that had to be moved have been rebuilt. The power
company has made a legally binding commitment to double the living
standards of the 6,300 residents within five years.

Before resettlement, they were among the poorest of the poor. Now they
have electricity, sanitation, clean water, all-weather roads and
better access to schools and health care. According to the World Bank,
87% of those resettled believe life is much better than before.

"In the old village things just weren't convenient," said Tiea, 25, a
villager whose family is doing so well that it is enlarging its new
home. "It wasn't a pretty place, the houses weren't very nice, and we
didn't have power. In the new village we have electricity, we can see
better. In the old place we had to use burning torches."

But one activist said it isn't clear whether the villagers can adapt
to new ways of making a living.

"People get schools, new roads, new houses and health care. People are
very happy with this, but the real problem is how to restore
sustainable livelihoods for communities who used to rely on the
natural resources, forests and fish�and now they've lost these natural
resources," said Ikuko Matsumoto, the Laotian program director for
International Rivers, a group that has long campaigned against the

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