Hydropower Development in the Mekong Basin: Nam Theun 2 and the need for better planning processes

Aviva Imhof, Shannon Lawrence and Carl Middleton, International Rivers
Wednesday, November 1, 2006


The Mekong region is undergoing a rapid expansion of hydropower development on both the Mekong mainstream and tributaries. Hydropower development in the basin is proceeding in a haphazard and unregulated fashion, threatening the integrity of the Mekong river ecosystem and the livelihoods of its 65 million inhabitants. Most of the plans are being developed without any consultation with local communities, NGOs and other members of civil society, without any opportunity for public debate, without any assessment of the cumulative impacts of the proposed developments on the hydrology and ecology of the Mekong River Basin, and without consideration of other options for meeting the region's energy needs.

Nam Theun 2 is the largest hydropower project under development in Laos and has been lauded by the World Bank, the Asian Development Bank (ADB) and other project investors as a model project that will pave the way for best practice hydropower development in the region. In 2005 the project received support from the World Bank and other investors, becoming the first major dam approved by the World Bank in a decade. At the time of project approval, then-World Bank President James Wolfensohn said: "We have spent the best part of a decade studying the project and evaluating the risks. In fact, we have been advised by some independent experts that we have studied it for too long, and been too focused on possible risks... Our decision, after a lot of deliberation, is that the risks can be managed."

But is Nam Theun 2 a model for how to plan and build sustainable hydropower projects? Halfway through the construction period, are the risks being managed adequately? If not, why not? This paper will seek to answer these questions by examining Nam Theun 2's planning and implementation process and drawing lessons for future energy planning and development in the Mekong region.

The paper starts with an overview of hydropower development in the Mekong Basin and identifies some recent trends and key concerns with current decision-making processes and project implementation. The paper then examines the planning process for Nam Theun 2 and outlines problems with implementation of the project's social and environmental mitigation and compensation measures two years into construction. Finally, the paper makes recommendations as to why a new planning process is needed for the region: one that integrates environmental, economic and social factors and would allow for coordinated development that would be in the best interests of both the region's inhabitants and the river basin's fragile ecosystem.

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