World Bank-backed dam powers ahead, despite social cost
jora@banktrack.org
jora@banktrack.org
As the World Bank returns to the big dam business with the inauguration
of Laos' largest hydropower project, it is coming under the scrutiny of
familiar adversaries: green groups and grassroots activists.
On the eve of the Dec. 9 ceremony to celebrate the Nam Theun
Two (NT2) hydropower project in the landlocked country, a coalition of
activists fired a letter to the Bank's president, Robert Zoellick, citing
social and environmental troubles that have surfaced with the building of NT2.
"More than 6,200 ethnic minority people relocated by
the project are still struggling to achieve sustainable livelihoods three years
after they lost access to their natural resources such as paddy fields, swidden
fields, forests and grazing lands," argued the letter signed by 34 civil
society groups and individuals from 18 countries.
The activists also drew attention to the plight of over
110,000 people living in 71 riverside villages and 101 hinterland villages who
face risks due to changes to the river ecosystem. "Impacts on the
downstream areas include flooding, decline of fisheries, riverbank erosion,
flooding of riverbank gardens, ecosystem changes along the river and poor water
quality," the letter revealed.
The letter to Zoellick - which was also addressed to
Haruhiko Kuroda, president of the Manila-based Asian Development Bank (AsDB) -
stems from the World Bank's decision to provide a security guarantee to the Nam
Theun Two Power Co, which has French, Thai and Lao shareholders.
The Bank's decision to endorse the 1.5 billion U.S. dollar
private sector project in Laos, one of South-east Asia's poorest countries, marked
its return to the big dam industry following a lengthy hiatus. This break came
in the wake of criticism that the Washington D.C.-based development funder
received in the 2000 World Commission on Dams report, which said that its push
for building large dams across the developing world has left a trail of social
and environmental woes.
In fact, the Bank billed NT2 as a showpiece of its new
thinking: the ability to support sustainable hydropower ventures.
"Nam Theun Two is an example of how hydropower can help
support development in an economically, environmentally and socially
sustainable way," says Keiko Miwa, the Bank's Laos country manager. "Our
engagement in hydropower and hydraulic infrastructure is an integral part of
the World Bank's approach to development, all the more so in a world with 1.5
billion people lacking access to electricity and one where the impact of
climate change is increasingly being felt."
To strengthen its credentials, the Bank is highlighting the
financial windfall that will boost the economic fortunes of Laos, a third of
whose 5.8 million people live below the poverty line. Since the NT2's turbines
came to life in March this year, the Lao government has earned 5.6 million U.S.
dollars from electricity sales to Thailand, Miwa told IPS in an e-mail
interview.
"(The Laotian government's revenue is) being budgeted
at around 10 million U.S. dollars for the coming year," she added. "They
will average around 80 million U.S. dollars per annum over the 25-year
concession period."
The foreign exchange earned from NT2, with its 39-metre high
dam and output of 1,000 megawatts of power, has been channelled to education,
health and rural infrastructure projects. Two million U.S. dollars have been
spent on education in poor districts, 1.7 million dollars on rural roads and
one million dollars on public health projects, reveals the Bank.
This sale of electricity to Thailand is part of Vientiane's
blueprint to lift the country out of poverty by becoming the "battery of
South-east Asia." The country's mountainous terrain and artery of rivers
have already seen plans being developed for 12 more large dams to export power
to its energy-hungry neighbours, including Vietnam.
It is a scenario that has placed the Bank and civil society
activists at odds, even though most of the planned large dam projects are
backed by corporate investors from Thailand, China and Vietnam, rather than the
Bank.
The Bank had hoped that the spree of planned dams in Laos
would follow the "sustainable hydropower" model it offered through
NT2. "The Lao Government should look for ways to apply lessons learnt from
NT2 to other hydropower projects in the country," says Miwa. "Some of
the lessons from NT2 should be how governments, private sector developers and
the World Bank could work together to achieve similar quality results."
But the reality is otherwise, warn activists, worried that
the dams being built in Laos will serve as a template for a big dam culture led
by private sector investors with little interest in the environmental and
social impact of these projects.
Three dams backed by the private sector in Laos are being
built without disclosing their environment impact assessments (EIA), reveals
Ikuko Matsumoto, Laos programme director for International Rivers, a global
environmental lobby based in the U.S. city of Berkeley. "These dam
builders are ignoring the sustainable model the World Bank said it was
promoting with NT2."
"It seems hard for the World Bank to say something to
these private sector investors even though the Bank had declared it wanted to
strengthen hydropower sector standards in Laos," Matsumoto said in an
interview. "These dam builders are also ignoring the concerns of NGOs
(non- governmental organisations)."