Banks report progress on Laos’ 1,070-MW Nam Theun 2

The World Bank and Asian Development Bank have issued a semi-annual report on the 1,070-MW Nam Theun 2 hydroelectric project, declaring work on the Laotian project to be on schedule and environmental protection and social mitigation programs well under way.

When the two lenders approved funding for the US$1.45 billion project in March 2005, they committed to supervise Nam Theun 2 closely.

�Following the river diversion in early March 2006, construction on the cofferdams was completed and main dam abutments are being constructed,� said the report, released November 3. �The headrace channel and tunnel, the powerhouse, and the downstream water works, including the regulating dam and pond and downstream channel, are all under construction. Overall construction quality remains good.�

The report said fears of unexpected cost escalations have significantly decreased, especially since most of the underground excavation has been completed. By mid-July, the site work force numbered 6,570, with 80 percent being Laotian nationals. The number is expected to increase to 10,000 by the end of the year.

�Construction is now better synchronized with environmental and social mitigation measures, thanks to the implementation of an accelerated relocation program and greater attention to environmental impacts,� it said.

The report also emphasized the importance of continuous monitoring of ongoing studies relating to downstream effects and wildlife management and the need to put in place a plan for environmentally sound biomass clearance in the future reservoir area on Laos’ Nam Theun River. (HNN 10/12/06)

Project developer Nam Theun 2 Power Co. is a venture of EDF International, Italian-Thai Development, Electricity Generating Plc. of Thailand, and Laos government-owned Electricite du Laos.

Study under way to expand 210-MW Theun-Hinboun

As an annex to the Nam Theun 2 report, the Asian Development Bank (ADB) reported a feasibility study for extension of the 210-MW Theun-Hinboun hydro project is under way. ADB said the study is expected to be the basis for finalizing a new power purchase agreement between Theun Hinboun Power Co. and Electricity Generating Authority of Thailand (EGAT) by the end of 2006.

The first hydro project to be developed by foreign private firms and Laos’ socialist government, Theun-Hinboun began commercial operation in 1998, diverting water from the Nam Theun River to a powerhouse, then discharging it into the Nam Hai River, a tributary of the Nam Hinboun.

In an update on the project, ADB reported Theun-Hinboun has achieved its intended purpose and is currently one of the largest foreign exchange sources in Laos, generating revenues of about US$55 million per year.

However, the bank noted a lack of baseline data on environmental and social effects in 1993 resulted in some design weaknesses. As a result, an action plan was developed to mitigate for environmental effects and to compensate affected people.

The extension project includes building a dam on the Nam Gnouang River, tributary of the Nam Theun, upstream from Theun-Hinboun. The dam will create a reservoir to regulate river flows into the Theun-Hinboun headpond, increasing power output in the dry season. It also includes increasing installed capacity at the existing powerhouse and possible construction of a small powerhouse at the new dam. The extension would be completed in 2011.


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