Archive for March 24th, 2010

March 24, 2010

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

The World Bank would like to note the following in response to a recent press statement entitled “Laos’ Nam Theun 2 Dam Operation Illegal”.

Vientiane, March 24, 2010 — The World Bank would like to note the following in response to a recent press statement entitled “Laos’ Nam Theun 2 Dam Operation Illegal”. 

The current operation of the Nam Theun 2 Hydropower Project is legal and consistent with the project’s legal agreements and operating plans.  The start of electricity generation has two immediate outcomes. First, it enhances the project’s social and environmental benefits to the affected people. Second, revenues generated will be used by the Government for pro-poor programs in education, health, and rural development, as well as for environmental protection.

The World Bank, as well as other International Financial Institutions and oversight agencies, have been encouraging progress towards drawdown of the reservoir by using the water for electricity generation. This will help resettlers to build their livelihoods through irrigation and improved land-use planning around the drawdown zone of the reservoir.

The community irrigation systems for the resettled people on the plateau are installed in a number of villages and the balance will be completed in the coming months.  These irrigation systems are based on tube wells adjacent to the reservoir.  The tube wells cannot be completed until there is a significant drawdown of the water in the reservoir. With the larger four turbines now operating, the drawdown is underway, allowing the irrigation systems to be completed.  The current approach incorporates lessons from the pilot program in a resettled community.

In the downstream areas, a comprehensive compensation and mitigation program designed in 2005 has been under implementation for several years in anticipation of project impacts, and many downstream people are already benefiting from this program on both the Nam Theun and Xe Bang Fai rivers. Every riparian community is being supported through extensive information and awareness campaigns about project impacts (such as erosion, water quality and river bank gardens) and the benefits people are receiving.

The Project has in place robust monitoring and oversight arrangements through which project impacts and progress are being tracked. The project’s environmental and social commitments continue over a longer time frame, some for the full 25-year concession period.  Early progress is promising. The results from socio-economic monitoring show that resettled people are making good progress in building their new livelihoods.  Project partners remain committed to managing the risks and challenges ahead in building sustainable livelihoods for project affected people.

Nam Theun 2 is an important development endeavor in Lao PDR’s long-term ambitions. Over the next 25 years, the NT2 Project will generate nearly $2 billion in revenue for pro-poor and environment programs across the country. Within the NT2 area, the project also aims to sustainably improve the lives of thousands of project impacted people, as well as protect the NT2 Watershed.

For more information:

Victoria Minoian

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March 24, 2010

Press Release: Laos’ Nam Theun 2 Dam Operation Illegal

Press Release

Project begins selling power to Thailand in violation of Concession Agreement and obligations to affected communities

Laos’ largest and most controversial hydropower project, Nam Theun 2, began full operation last week in violation of legal obligations to provide compensation and livelihood restoration to affected communities. In an attempt to avoid its obligations, the Nam Theun 2 Power Company (NTPC) called last week’s commencement of power production “commercial export” of electricity rather than “commercial operation” which would require compliance with Concession Agreement provisions.

Nam Theun 2 is being financed by the World Bank, the Asian Development Bank and a host of other public and private financial institutions. These institutions have maintained their support for the project despite violations of their policies and the project’s Concession Agreement. For example, last week’s commercial operation started before resettled communities received irrigated land and before downstream communities received compensation for flooded gardens and alternative water supply sources, to which they are legally entitled.

Ikuko Matsumoto, Lao Program Director of International Rivers, said, “The Nam Theun 2 Power Company is operating the dam without complying with its Concession Agreement. The project is violating people’s human rights by preventing access to clean water and by destroying critical food sources without providing compensation.”

On the Nakai Plateau, where 6,200 people have been resettled to make way for the reservoir, villagers have not been provided with irrigation systems in violation of legal commitments made in the project’s Concession Agreement.

The project is also affecting around 120,000 people living downstream along the Xe Bang Fai River. Since the project started full operation, the water level of the upper Xe Bang Fai River has increased by 3.6 meters, as noted during International Rivers’ visit to the area. The power company has warned communities living along the Xe Bang Fai not to drink the river water because it is contaminated. However, replacement groundwater pumps provided to communities are not functioning or the groundwater is unsuitable for domestic consumption. Last week, only two groundwater pumps out of seven were working in Navan Tai Village, and in Mahaxai Tai Village only two pumps were working. Villagers in Boueng Xe Village were told that the groundwater contained elevated levels of iron making it unsuitable for human consumption.

In addition, riverbank vegetable gardens along the Xe Bang Fai have been flooded by the rising river, but communities have not yet received compensation, in violation of World Bank policy.

Moreover, serious erosion has been occurring downstream along the Xe Bang Fai River as a result of the fluctuating water levels since December 2009 when NTPC began test operations. No compensation for the riverbank gardens that were washed away has been paid to the villagers.

Matsumoto says, “As funders of Nam Theun 2, the Asian Development Bank, the World Bank, the European Investment Bank and the Equator Principles Banks have an obligation to ensure that their requirements are upheld and that promises to Lao villagers are kept. Dam operation should be suspended until the Nam Theun 2 Power Company complies with its legal agreements.”

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Ikuko Matsumoto
+1 510-848-1155

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