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ADB to partially fund new dam on Nam Ngum River
The Asian Development Bank (ADB) will provide a US$465 million loan to finance the construction of a 440 MW hydropower plant in Laos in the belief the project will help to reduce poverty rates.
The bank announced yesterday that it would provide a US$350 million loan to the Nam Ngum 3 Power Company, which is owned by three private sector companies from Thailand and Japan, to build the US$1 billion power plant in Vientiane province.
The bank will also provide a loan of US$115 million to the Lao government so that it can acquire a stake in the project.
The remaining investment capital will come from Thai banks and other international financial institutions.
According to the ADB, the Nam Ngum 3 project will include a 220 metre high dam that will create a 27.5 square kilometre reservoir.
Seasonal flooding from the reservoir will require the relocation of 144 households. All of the families will receive permanent housing and title to their new residential and agricultural land - a first in this area of the country.
The 27 year concession project is expected to generate upwards of US$770 million for Laos, of which more than US$200 million is specifically earmarked for poverty reduction and environmental protection programmes, according to a press release from the ADB.
The public-private Nam Ngum 3 power plant will provide 2,072 gigawatt hours of clean energy annually for export to neighbouring Thailand.
About half of Thailand's greenhouse gas emissions come from power generation, and most of its electricity is generated by power plants using fossil fuels, primarily natural gas, states the press release.
“By using hydropower instead of fossil fuels, Thailand will avoid an average one million tonnes of carbon dioxide emissions every year, the equivalent of taking 175,000 vehicles off the road,” said Director of ADB's Southeast Asia Department Mr Anthony Jude.
About 45 more households located along the to-be upgraded national road and planned power transmission line may also lose housing and parcels of land, and will be fully compensated for their losses, according to the press release.
“Many families in these impoverished communities have lived in relative isolation, with only limited healthcare and social service access,” said Mr Jude. “Villages most affected by the project will receive higher quality healthcare, improved education opportunities, access to electricity and all-weather road access.”
The ADB's stringent environmental and social safeguards will ensure that any environmental and social impacts will be minimised and mitigated, and the livelihoods and standards of living of all those directly affected by the project will be better than they are now, according to the press release.
The bank is also actively supporting efforts to assess and address any cumulative impacts from the various hydropower plants in the river basin, including through the newly-formed Nam Ngum River Basin Committee.
The Nam Ngum 3 plant, expected to be operational in 2017, will be located upstream of two existing hydropower plants, and downstream from another plant that is currently under construction. The Nam Ngum 4A and 4B plants are also planned upstream of Nam Ngum 3.
phnom penh post
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