Nam Theun 2 Dam Inauguration Hides Project’s Real Costs

Tuesday, December 7, 2010

More Than 100,000 People Continue to Suffer Impacts

After over a decade of controversy, the Nam Theun 2 Hydropower Project in central Laos was inaugurated this week, although there is little reason to celebrate. As tens of thousands of people continue to suffer the impacts of the project, 34 civil society groups and individuals from 18 countries have called on the World Bank and Asian Development Bank to take immediate action to meet their promises to affected communities.

The project has displaced 6,200 indigenous people on the Nakai Plateau and affected more than 110,000 people downstream who depend on the Xe Bang Fai and Nam Theun rivers for their livelihoods. The most urgent unresolved issues that must be addressed include:

  • Communities on the Nakai Plateau still have no means for a sustainable livelihood, threatening their long-term food security
  • Tens of thousands of people living downstream along the Xe Bang Fai River have suffered poor water quality, diminished fisheries and flooding of their riverbank gardens, and the project’s funding is inadequate to restore their livelihoods
  • The Nam Theun 2’s reservoir has opened up access to the Nakai-Nam Theun National Protected Area, exacerbating logging and poaching and threatening its ecological integrity
  • Whilst the project was supposed to improve standards for hydropower development more generally in Laos, there is little evidence that this has happened.

Costing US$1.3 billion and funded by the World Bank, Asian Development Bank (ADB) and a host of other public and private funders, the project has been marketed as a model dam project and a development panacea for cash-strapped Laos. In reality, however, many problems remain. The project has violated provisions of its Concession Agreement and the World Bank’s resettlement policies, and the sustainable livelihoods of people directly affected by the project are far from guaranteed. In March 2010, for example, full-scale power production commenced in violation of legal obligations, including to provide downstream communities with adequate alternative water supplies and compensation for flooded gardens.

International Rivers will continue to monitor the Nam Theun 2 Dam and ensure that the project’s developers and funders are held fully responsible for addressing the project’s impacts on people and the environment.

More information: