NGOs cite flaws in project’s environmental impact assessment and social development plan.
On January 28, the World Bank announced that it is beginning appraisal of the proposed US$1.3 billion Nam Theun 2 (NT2) Hydropower Project in Laos, following nearly a decade of discussion on the controversial dam project. During appraisal, the Bank will review the soundness of the economic rationale of the project, the environmental and social mitigation measures, and the proposed framework for managing NT2 revenues in a transparent way.
Technical reviews commissioned by the International Rivers Network (IRN) and Environmental Defense have revealed serious flaws in the project’s design, citing the lack of rigorous environmental impact assessments and clear, feasible plans for compensating affected communities. Questions have also been raised on the capacity or political will of the Lao government to effectively manage the revenues from the project or mitigate the impacts on tens of thousands of people’s lives.
The Bank’s decision to move forward with the appraisal despite various concerns raises expectations that the World Bank Management intends to bring the project to the Board by the end of March. If approved, the project would forcibly displace 6,200 indigenous people and impact more than 100,000 villagers who depend on the Xe Bang Fai River for fish, agriculture and other aspects of their livelihood.