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Summary of publication
The review assessed the social, economic, and environmental costs and benefits associated with the proposed Nam Theun 2 Hydroelectric Dam project.
The World Bank (WB) and Asian Development Bank (ADB) are considering Government of Laos requests for loans and guarantees to support the Nam Theun 2 (NT2) hydroelectric dam in Lao PDR, which has been under consideration for 10 years. The WB's preparedness to consider these GoL requests has been viewed as a test case, signalling the re-emergence of WB development assistance for large infrastructure projects. The project has attracted significant international attention from both proponents and opponents of the dam.
Australia's representatives will be required to take a position on these loans and guarantees at forthcoming WB and ADB board meetings. To inform Australia's position on this controversial project, an independent review of NT2 project documentation was commissioned, in consultation with the Departments of Foreign Affairs and Trade, Treasury, and Environment and Heritage.
The review assessed the social, economic, and environmental costs and benefits associated with the proposed NT2 project - concluding that support for the project is justified, notwithstanding some concerns.
The review has been shared with the WB and ADB. During the review period and since receiving the report, the Banks have continued to refine project mechanisms and safeguards. This adaptive approach means that some of the concerns raised by the review have since been addressed. In particular, a range of enhancements have been made to the Social Development Plan, and the package of compensation to people in the Xe Bang Fai area has been very significantly increased.
It should be noted that the views expressed in the review report are those of the authors and do not represent Australian Government policy.
Readers should note that a revised version of the report has been posted to this site on 7 April 2005. Changes are limited to clarifications relating to the International Union for the Conservation of Nature. Changes affect pages 19 and 21.