Description
The proposed Nam Theun 2 Hydroelectric Project includes the development, construction, and operation of
- a 1,070-megawatt trans-basin diversion power plant on the Nam Theun River,
- a 450-square kilometer (km2) reservoir on the Nakai Plateau,
- a 39-meter-high dam northwest of the plateau,
- a powerhouse 350 meters below the plateau,
- a regulating pond below the powerhouse, and
- a 27-kilometer (km) channel from the regulating pond to the Xe Bang Fai River Basin, also a tributary of the Mekong River.
The plant would sell most of its production to Thailand, generating a secure, long-term flow of revenue for the Government of the Lao People’s Democratic Republic. This revenue would be an important source of funding for the government's efforts to sustain economic development based on its National Growth and Poverty Eradication Strategy and reduce poverty in Lao PDR.
The Nam Theun 2 Power Company Limited (NTPC) will develop the project on a build-own-operate-transfer (BOOT) basis for a concession period of 31 years, of which the operating period is 25 years. The project will be transferred to the Government of the Lao PDR free of charge at the end of the concession period.
NTPC is owned by a consortium comprising
- Electricity de France International (EdFI) - 35%
- Electricity Generating Company (EGCO) of Thailand - 25%
- Italian Thai Development Company Limited (ITD) of Thailand - 15%, and
- Government of Lao PDR - 25%
NTPC and the Lao PDR government have comprehensively assessed and evaluated the potential social and environmental impacts of the proposed project.
The project has been designed in extensive consultation with affected people and international civil society. It is focused on avoiding and mitigating negative impacts, and includes compensatory provisions where impacts cannot be fully mitigated.
International agencies are providing funding and support to the project, including
- Agence Française de Développement,
- Asian Development Bank (ADB),
- European Investment Bank, and
- World Bank.
These institutions are undertaking an extensive due diligence process to ensure the design and implementation of the project meet or exceed the safeguard compliance requirements of each institution.
ADB's Assistance
ADB is providing technical assistance (TA) to the Government of Lao PDR to prepare the project. The first TA was approved in November 2003. The second TA was approved in April 2004.
ADB will support the project through
- a public sector loan to the Government of Lao PDR to help fund its purchase of equity in NTPC,
- a private sector loan directly to NTPC, and
- a political risk guarantee to NTPC.
ADB's assistance also includes: