Summary Environmental and Social Impact Assessment: Nam Theun 2 Hydroelectric Project

Published Date: 
11/2004

The potential for hydropower development on the Nam Theun and Nam Kading systems in central Lao People’s Democratic Republic (Lao PDR) was first identified by the Mekong Secretariat in the 1970s. The studies undertaken by the Government of Lao PDR identified a series of potential sites for hydropower development on the Nam Theun, which were given numbers for reference purposes, including the Nam Theun 2 site. In 1991, following initial studies, the Government of the Lao PDR, with support from the World Bank and the United Nations Development Programme, commissioned the Snowy Mountain Engineering Corporation to undertake a Feasibility Study for the Nam Theun 2 Hydroelectric Project (the Project). A number of detailed studies were subsequently completed, including the investigation of alternative options and economic evaluations. Since 1994, the Nam Theun 2 Electricity Consortium has been responsible, with support from the Asian Development Bank (ADB), Agence Française de Développement (AFD), World Bank, and the Government, for development of the project design. On 1 January 2004, the responsibilities of Nam Theun 2 Electricity Consortium to develop the Project were transferred to Nam Theun 2 Power Company Limited (NTPC), which is wholly owned by four companies: Electricité de France International (35%), Electricité du Laos (EDL, 25%), Electricity Generating Public Company Limited (25%), and Italian-Thai Development Public Company Limited (15%).

The Project will dam the Nam Theun, a tributary of the Mekong, generating 1,070 megawatts (MW) of electricity for supply to the Electricity Generating Authority of Thailand (EGAT) (93%) and EDL (7%). The Project is forecast to generate approximately $1.9 billion in revenues (in nominal terms) for the Government over the 25-year project concession period. In so doing, the Project is expected to be one of the largest sources of foreign currency income for the Government over its lifetime, a very important contributor to the Lao PDR's gross domestic product, and a significant source for the Government’s fiscal revenues after repayment of the commercial debt. The Project is recognized by the Government as an essential part of the country's development framework to reduce poverty.

This Summary Environmental and Social Impact Assessment (SESIA) presents the baseline conditions, then summarizes the key environmental and social impacts of the Project and the approach and methods proposed for their resolution. This document fulfills ADB’s environmental assessment requirements for a Summary Environmental Impact Assessment of the Project. It draws on the work presented in a series of separate reports submitted to the Government, ADB, AFD, and World Bank as shown in Table 1. These studies were undertaken to meet the safeguard policies and requirements of these four entities, and are available on the NTPC’s web site (www.namtheun2.com). They reflect several additional studies and analyses that were undertaken to improve the impact assessment and management approaches documented in earlier drafts. They also reflect comments received during stakeholder consultation carried out in the project area and internationally between May and September 2004.

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