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dam-l PR: World Bank Green Light for Nam Theun 2 (fwd)
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From owner-irn-mekong@igc.org Tue Nov 4 23:22:17 1997
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Date: Tue, 4 Nov 1997 20:29:01 -0800
From: patrick@irn.org (Patrick McCully)
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Subject: PR: World Bank Green Light for Nam Theun 2
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PRESS RELEASE
4 November 1997
Aviva Imhof
Mekong Program Coordinator
Tel: + 61 2 9387 5210
World Bank Green Light for Nam Theun 2
The World Bank is to prepare a package of loans and guarantees for the
controversial Nam Theun 2 hydropower project in Laos. The decision was made
at the end of last week despite the recent economic crash in Thailand - the
sole customer for the dam's electricity. Reduced projections of future
power demand in Thailand make it extremely uncertain that the Thai
electricity utility will buy Nam Theun 2 power at an attractive price.
Aviva Imhof, Mekong Program Coordinator for International Rivers Network, says:
"In the midst of South-East Asia's economic crisis it is foolish for the
Bank to push ahead with this highly risky project. It is very likely that
it will not produce its expected benefits. The main risks are that the
government of Laos will be further indebted and the livelihoods of
thousands of local people destroyed."
The consortium which hopes to build and operate the 681 MW dam is led by
Australian construction company Transfield and Electricité de France. They
have stated that they will withdraw if the World Bank does not guarantee
their investments against actions which may be taken by the Lao government.
The proposed financing package for the dam is expected to be submitted for
approval by the Bank's board in mid-1998.
Predictions of the economic benefits of the dam have been steadily
decreasing since the Bank first recommended it be built back in 1991. At
that time it was estimated that the dam would bring in annual revenue to
Laos of $176 million. The latest Bank-commissioned economic impact study,
however, puts the benefit to Laos at under $33 million annually.
Independent experts believe that even this figure is likely to be highly
optimistic.
The Thai utility EGAT has not yet agreed to buy the power from Nam Theun 2.
The Thailand Load Forecast Committee last month sharply cut its power
demand projections for the period 1997-2011. According to Thailand's
National Energy Policy Office, Nam Theun 2 is not on EGAT's latest power
development plan. Nam Theun 2 could be left without a buyer for its power
or be forced to sell the power at a price too low to repay its huge
construction cost.
"Nam Theun 2 has sucked in a huge amount of human and financial resources,
depleting the Lao government's already weak capacity to deal with its
development needs. The Bank should surely understand by now that promoting
megaprojects in poor and indebted countries is a recipe for economic and
environmental disaster," Ms Imhof concluded.
For further information, please contact:
Aviva Imhof + 61 2 9387 5210 (w) or 9955 5940 (h) (Sydney, Australia)
aviva@irn.org