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Home › Dodgy Deals ›
Dodgy Deal
Nam Theun 2 damLaos

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

Tania Lee, International Rivers
Ame Trandem, SOMO

Last update: 2015-11-01 14:53:10

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

Tania Lee, International Rivers
Ame Trandem, SOMO

Last update: 2015-11-01 14:53:10
Why this profile?

What must happen

International Rivers has been monitoring the implementation of Nam Theun Hinboun Corporations' (NTPC) social programs for resettled villagers on the Nakai Plateau and the situation of people living downstream, along the Xe Bang Fai River. As of 2013, NTPC's social and environmental programs along the Xe Bang Fai have been transitioned over to the Lao Government, supported by ADB and World Bank programs and financing. These villagers continue to face food security problems due the fact the low fish catches, and decline in ability to plant reliable crops of rice and vegetables near the shores of the river. Many cannot afford to pay for electricity, despite the irony of having to live with the daily impacts of a hydroelectric dam upstream.

The Nakai Program is currently undergoing a hand-over phase as well. During this time of transition, International Rivers continues to monitor the situation of affected villages and call on financiers to ensure full reparations and livelihood restoration of all affected populations.

About
Sectors Hydroelectric Power Generation
Location
This project has been identified as an Equator Project

The US$1.45 billion Nam Theun 2 Hydropower Project, in the small Southeast Asia country of Lao PDR, is involves a 39-meter high dam on the Theun River, a major Mekong tributary, and a 450-square kilometer reservoir on the Nakai Plateau. Water is diverted to a powerhouse before being released into another Mekong tributary, the Xe Bang Fai River. Nam Theun 2 has forcibly displaced 6,200 indigenous people living on the Nakai Plateau and affects more than 110,000 people whohave historically depended on the Xe Bang Fai River for fisheries, agriculture, transportation and water supplies. Thousands of other Lao villagers have lost land and resources for the construction of Nam Theun 2's downstream channel and transmission lines. 

This project is built with the stated intention of generating revenue for the Lao government by exporting over 90% of the electricity generated to neighboring Thailand. However, as a result of the complete lack of transparency of how revenues are being used by the authorities, there is no possible way to gauge how much money is being invested back into affected communities.  

Impacts

Social and human rights impacts

Forced displacement, destroyed livelihoods
Now that the Nam Theun 2 Hydropower Project is in operation, a wide range of negative social, environmental and economic consequences are apparent. The project has directly affected approximately 1 in 50 Laotians. Despite being propped up with financing from the Asian Development Bank and World Bank, programs to restore villagers' livelihoods have ultimately failed to come up with options to sustain  people's social and economic well being on both the Nakai Plateau and along the Xe Bang Fai River.

The approximately 6,200 resettled indigenous people now living on the Nakai Plateau have new houses, roads, and electricity. But they continue to raise major concerns about how they will be able to feed their families over the long term and earn sufficient incomes to pay for electricity and basic daily goods. Villagers have received small plots of poor quality land on which traditional farming methods for rice and vegetables consistently fail. Given the lack of market for any produce, and a lack of ability to grow enough food on which to live, they have come to rely on expensive outside goods being trucked up to the plateau. People have also been confronted with lower fish catches on the reservoir than originally promoted by NTPC.

With few livelihood opportunities available, many young people are migrating out. The illegal trade in rare rosewood timber is also providing some families with an immediate cash windfall that is neither sustainable over the long haul nor a solution to the question of how to ensure the well-being of future generations of local people.  

Along the Xe Bang Fai, villagers are now faced with more frequent flooding, a complete loss of the fisheries they once relied upon, and flooded riverbank gardens. Solid plans to replace these critical sources of food and income have failed to materialize, and the short-term programs set up by NTPC, the World Bank and Asian Development Bank have yet to successfully restore all affected villagers' livelihoods.

The World Commission on Dams found that women and ethnic minorities were disproportionately affected by dam projects. As women are often responsible for ensuring the sustainable livelihoods of their families, impacts on these livelihoods through destruction of fisheries, flooding of agricultural land and forests, and displacement often result in women bearing a disproportionate share of the costs. It is women who are often left with the burden of caring for their families, finding alternative land and water sources and alternative livelihoods when these are taken away through the development of destructive dam projects.


Environmental and climate impacts

Nam Theun 2 has already had significant negative impacts on the biodiversity of the area. The project is located in and adjacent to one of the largest remaining tropical forests in mainland Southeast Asia. The reservoir fullly inundated the habitat of 60 species of birds and mammals and disrupted migration routes. Before the dam was built, the area was home to a large variety of rare and endangered plant and animal species, including one of the last remaining populations of wild elephants in Laos. The project will has had adverse impacts on fisheries on the Theun River and the Xe Bang Fai.

 

A key selling point of the Nam Theun 2 project was that it would provide funds for the protection of the globally significant Nakai-Nam Theun National Protected Area, yet the reservoir has opened up access to the area, threatening its ecological biodiversity.  As of mid-2013, the international Panel of Social and Environmental Experts that has been conducting monitoring missions since the beginning of project operations, observed that poaching of animals and illegal logging of rosewood trees continues at an alarming pace. The programs and staff that are supposed to protect the area are grossly underresourced. As a result, the forest area surrounding the dam is being decimated with little hope of preservation of this rich diversity of life for future generations.


Other impacts

Faulty "development" justification
Nam Theun 2’s “development” justification hinges on the Lao government using revenues from the project to help the project affected people and ensuring that their livelihoods are improved or restored. This claim was the basis for World Bank and ADB support for Nam Theun 2. As evidenced by some of the problems to date, including the failure to provide replacement land to villagers affected by NT2's construction, the World Bank and the ADB have no real enforcement powers to ensure that Lao the government and NTPC keep their promises.

According to World Bank governance indicators, Laos rates far below most low-income countries on civil and political rights and control of corruption. The World Bank’s revenue management proposal for Nam Theun 2 provides no assurances that these constraints will be overcome. Revenue allocation, monitoring and reporting is left to the finance ministry officials in the Lao Government. The revenue management arrangements specifically reject the use of an independent oversight body or external independent auditing of Nam Theun 2 revenues.

Financiers
Institution type
Finance type
Year

In May 2005 a US$ 1 billion project financing package for the Nam Theun 2 dam was signed. See above for the participating banks (source: News Release NTPC, March 2004).

Companies

Electricité de France International

France
Website

Italian-Thai Development Corporation Limited (ITD)

- international -
Website

Lao Holding State Enterprise (LHSE)

Laos
Website

Nam Theun 2 Power Company

Laos
Website
No companies
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

The stalled battle for the future of the Mekong River

2011-04-20 | Laos | BBC News
BankTrack news BankTrack blog Partner news Partner blog

New Laos dam test for hydropower projects

2010-12-09 | Laos | Wall Street Journal
BankTrack news BankTrack blog Partner news Partner blog

Laos dam faces unresolved issues

2010-12-09 | Laos | UPI
Blog
BankTrack news BankTrack blog Partner news Partner blog

Nam Theun 2 inauguration hides real costs of controversial Equator Principles project

More than 100,000 people continue to suffer project impacts
2010-12-07 | Laos | International Rivers
BankTrack news BankTrack blog Partner news Partner blog

World Bank-backed dam powers ahead, despite social cost

2010-12-07 | Bangkok | Inter Press Service
BankTrack news BankTrack blog Partner news Partner blog

The Forgotten Downstream Victims of Large Dams

2010-06-18 | The Huffington Post
BankTrack news BankTrack blog Partner news Partner blog

Profiling Nam Theun 2

2010-05-03 | Waterpower Magazine
BankTrack news BankTrack blog Partner news Partner blog

Along With Power, Questions Flow at Laos's New Dam

Science: Vol. 328. no. 5977, pp. 414 - 415
2010-04-23
Blog
BankTrack news BankTrack blog Partner news Partner blog

Laos hydropower project deprives villagers of water, food, income

2010-04-07 | Bangkok | Ikuko Matsumoto
BankTrack news BankTrack blog Partner news Partner blog

Laos' Nam Theun 2 Dam Starts Illegal Operation

2010-03-25 | The Huffington Post
BankTrack news BankTrack blog Partner news Partner blog

Statement by the World Bank on recent comments about Nam Theun II operation

2010-03-24
Blog
BankTrack news BankTrack blog Partner news Partner blog

Laos’ Nam Theun 2 dam operation illegal

Equator Principles project begins selling power to Thailand in violation of Concession Agreement and obligations to affected communities
2010-03-23 | Laos | International Rivers
BankTrack news BankTrack blog Partner news Partner blog

Greenwashing Hydropower: The Problems with Big Dams

2010-02-01 | World Watch magazine
Blog
BankTrack news BankTrack blog Partner news Partner blog

Equator Principles: Principles, Profits or just PR?

NGOs ask hard questions at anniversary of Bank Standards
2004-06-03 | Amsterdam, The Netherlands | Friends of the Earth US
Resources
Documents
Images
Videos
Links
2010-12-06 00:00:00

Nam Theun 2 hydropower project. The real cost of a controversial dam

NGO document
2010-12-06 00:00:00 | International Rivers
2010-11-06 00:00:00

Voluntary approach will not resolve dam conflicts

NGO document
2010-11-06 00:00:00 | International rivers
2010-09-24 00:00:00

Letter to the World Bank and the ADB concerning the Nam Theun 2 Hydropower project

Correspondence
2010-09-24 00:00:00 | International Rivers & Mekong Watch
2010-08-01 00:00:00

Protecting rivers and rights: Ten years after the World Commission on Dams report

Other document
2010-08-01 00:00:00 | International Rivers et. al.
2010-08-01 00:00:00

Protecting rivers and rights: ten years after the World Commission on Dams report

NGO document
2010-08-01 00:00:00 | International Rivers et.al
2010-07-07 00:00:00

Annual update on Nam Theun 2 Hydropower Project (NT2)

Other bank document
2010-07-07 00:00:00 | WB & ADB
2010-05-27 00:00:00

Response to NGO letter concerning NT2 of 100327

Correspondence
2010-05-27 00:00:00 | BNP Paribas
2009-12-07 00:00:00

Thailand’s Commercial Banks’ Role in Financing Dams in Laos and the Case for Sustainable Banking

NGO document
2009-12-07 00:00:00 | International Rivers
2008-09-20 00:00:00

Power Surge: The Impacts of Rapid Dam Development in Laos

NGO document
2008-09-20 00:00:00 | International Rivers
2008-06-01 00:00:00

Nam Theun 2 Hydropower Project: Risky business for Laos

NGO document
2008-06-01 00:00:00 | International Rivers
2008-04-11 00:00:00

Statement on NT2 Reservoir Flooding

Other document
2008-04-11 00:00:00 | International Rivers
2008-04-08 00:00:00

NT2 Panel of Experts 13th and 14th Reports

Other document
2008-04-08 00:00:00
2008-02-27 00:00:00

Trip report and Project update

NGO document
2008-02-27 00:00:00 | International Rivers
2007-05-23 00:00:00

Nam Theun 2 Trip Report and Project Update

NGO document
2007-05-23 00:00:00 | International Rivers
2007-05-10 00:00:00

Panel of Experts NT2 Report

Other document
2007-05-10 00:00:00
2005-05-02 00:00:00

Letter to Standard Chartered on Nam Theun 2

Correspondence
2005-05-02 00:00:00 | International Rivers and others
2004-03-01 00:00:00

Nam Theun 2 Financing Launched

Company document
2004-03-01 00:00:00 | Nam Theun 2 Power Company

Nam Theun 2 - destruction of forest and livelihood

2010-09-14
Pictures by Titi Soentoro

Laos - Theun River Basin

2009-03-18
Map of Nam Theun 2 and Theun-Hinboun Expansion Projects

Nam Theun 2 Hydropower Project, Laos

2007-06-14
Temporary houses in Ban Done resettlement village Boys fishing in the Xe Bang Fai Excessive logging/clearance for road on the Nakai Plateau Fish from the Xe Bang Fai Nam Theun 2 dam site, March 2007 Waiting for permanent houses, NT2 resettlement site Ban Sop Phene Water buffalo in the area to be flooded by the NT2 reservoir
Photos from the Nam Theun 2 dam project in Laos.

Risky Business: the Nam Theun 2 Hydropower Project

The Nam Theun 2 Hydropower Project, the largest dam in Laos, was hailed by many as they way to reduce poverty and demonstrate best practice in socially and environmentally responsible dam building, still the initial signs have not been promising...
2010-03-22 16:54:40

Subtitled interview: Project area

Laos, May 2009
2010-03-22 16:51:33

Subtitled interview: Resettlement village

Laos, May 2009
2010-03-22 16:50:41

Subtitled interview: Resettlement area

Laos, May 2009
2010-03-22 16:49:26

Subtitled interview: downstream Xe Bang Fai river

Laos, May 2009
2010-03-22 16:48:18

Additional Footage: Project Area

Laos, May 2009
2010-03-22 16:46:58

Additional Footage: Nakai Reservoir

Laos, May 2009
2010-03-22 16:45:50

Additional Footage: Resettlement Village

Laos, May 2009
2010-03-22 16:44:54

Additional Footage: Xe Bang Fai river

Laos, May 2009
2010-03-22 16:43:58

Additional Footage: Fish

Laos, May 2009
2010-03-22 16:42:30

Additional footage: more ways to make a living

Laos, may 2009
2010-03-22 16:40:32

Laos Dam Project Raises Concerns

a video feature by AlJazeera in English from 20 October 2007
2008-04-23 10:38:51

International Rivers on Nam Theun 2

Rivers Watch East and Southeast Asia

World Bank page on Nam Theun 2

Power Surge: The Impacts of Rapid Dam Development in Laos

This report of International Rivers chronicles the social and environmental debt created by the dam-building boom in Laos.

Save the Mekong

The Save the Mekong coalition is a network formed of local and international groups and ordinary people who all share a concern about the future of the Mekong River.
Updates

2013

2013-01-01 00:00:00 | Latest update

By the end of 2012, the social and environmental programs implemented by Nam Theun 2 Power Company downstream, along the Xe Bang Fai River were handed over to be managed by local government ministries. The World Bank and Asian Development Bank are providing substantial financial support to boost support for affected villagers' small scale agriculture production, small livestock raising and artificial fish ponds. However, access to clean water supplies and food security and economic self-sufficiency remains in question for tens of thousands of affected villagers who are forced to cope with the changes brought by the damming of the river upstream.

In mid March 2010, the Nam Theun Power Company started full operation of the dam without fulfilling all requirements of the Concession Agreement. NTPC is thereby violating legal obigations to provide compensation and livelihood restoration to affected communities. Read more.

In April 2008, the diversion tunnel was closed in preparation for dam gate closure and reservoir impoundment in mid-June 2008. The project will start power production at the end of 2009.

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