Annual Stakeholders Forum for Nam Theun 2 Project Gets Under Way

THAKHEK, LAO PEOPLE'S DEMOCRATIC REPUBLIC – People affected by and interested in the Nam Theun 2 Hydroelectric Project in Lao People's Democratic Republic (Lao PDR) are gathering today to hear updates on its progress, both in terms of the construction, as well as the social and environmental safeguards.

The Nam Theun 2 Hydroelectric Project Annual Stakeholders Forum attracts local and national Lao PDR government officials, village representatives, nongovernment organizations, the media, representatives of private companies involved in the project, as well as international organizations such as ADB.

The forum is an opportunity for interested stakeholders to hear updates on the project, share lessons learned and engage with the Lao PDR Government, developers, and international finance institutions on a range of project-specific issues including project implementation, construction progress, environmental management, resettlement measures and livelihood restoration, social development and gender activities, and revenue management.

“These consultations are an important part of project transparency and will be essential throughout the implementation of the project,” says Marla C. Huddleston, ADB Senior Social Development/Resettlement Specialist. “Such consultations ensure prompt feedback and assist in providing valuable input that help to improve the planning and implementation process and make the social and environmental safeguards more effective.”

The Nam Theun 2 Hydroelectric Project (NT2) involves the building of a 1,070-megawatt power plant on the Nam Theun River in central Lao PDR. Full construction has begun and the project is expected to be completed in 2009, when power generation is planned to begin.

About 93% of the electricity generated by the plant will be exported to Thailand and will generate revenue for the Lao PDR through taxes, royalties, and dividends. The remaining 7% of electricity produced would be available for domestic consumption. NT2 will export about 5,354 gigawatt-hour (GWh) of electricity annually to Thailand it will generate about $1.9 billion in foreign exchange earnings for the Government over the 25-year operating period.

The total estimated base cost of the project is about $1.25 billion. ADB is supporting the project through a $20 million public sector loan to the Government to help fund its purchase of equity in the project; a $50 million private sector loan directly to the developer, the Nam Thuen 2 Power Company Limited (NTPC); and a $50 million political risk guarantee to NTPC. To date, the project is proceeding well, according to ADB officials.

“The project has gotten off to a good start, but there is still a lot of work that needs to be done to more effectively coordinate its construction and safeguards aspects,” says John R. Cooney, Director of the ADB’s Southeast Asia Department’s Infrastructure Division. “Construction and safeguard measures need to be addressed in tandem in order to ensure the project’s long-term success.”

Detailed information on NT2 is available at www.poweringprogress.org and www.namtheun2.com.

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