Laos turns to hydropower to be 'Asia's battery'
The Laos government is banking on hydropower - with plans to build 55 dams - to sell electricity to its Asian neighbors. But critics say hydropower comes at the cost of more displaced farmers and altered rivers.
Scarred by war and plagued by poverty, Laos now dreams of becoming a regional energy superpower. Its communist government plans to capitalize on 55 hydroelectric dams built on rivers that crisscross this sliver of land between Thailand and Vietnam.Skip to next paragraph
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"If all sources of energy can be developed, Laos can become the battery of Southeast Asia," says Industry and Commerce Minister Nam Viyaketh during a recent interview in the capital. "We can sell our energy to our neighbors. Laos can be rich."
Perhaps nowhere is Mr. Nam's ambitious hydropower plan more explicit than in the massive Nam Theun 2 (NT2) hydroelectric plant, which began operating April 17 and is expected to bring in $2 billion in government revenue over the next 25 years by selling 95 percent of its electricity to Thailand.
The $1.45 billion, 1,070-megawatt (MW) dam was bankrolled in part by international investors including Électricité de France. French President Nicolas Sarkozy is expected to attend the official inauguration on Nov. 2, along with the presidents of the World Bank and Asian Development Bank.
Laos produced 1,600 MW of energy before NT2 began operating, and Nam says the government wants to increase production to 23,000 MW by 2030. Both Vietnam and Thailand want to buy 7,000 MW each, while Cambodia wants 2,000. As far as China goes: "However much you have, they will import from you."
However, echoing a story that's played out for decades across Asia, Africa, and South America as developing countries dam their rivers for energy, critics say the dam projects will displace thousands of Laotians and cause irreparable environmental damage.
Such trepidations are groundless, according to Christopher Hnanguie, a country economist with the Asian Development Bank, which provided loans for the project. Eighteen years of research and consultation with local communities went into the project, he says, resulting in an agreement whereby resettled communities receive better housing, medical clinics, electricity, and financial assistance such as small business loans.
"The environmental and social safeguards are the best in the world," says Mr. Hnanguie.
'Life used to be better'
While proponents of NT2 say adversely affected communities have been compensated and profits will be funneled into alleviating poverty, villagers affected from past projects say their lives have yet to improve.
"Life was definitely better in the old village," says a man who was relocated in 1997 to make way for the Huouay Ho dam, also in the central Laos province of Khammuan.