The Nam Theun 2 Project

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The Contested Landscapes of the Nam Theun, Lao PDR
Australian Mekong Resource Centre


The Nam Theun 2 Project The proposed Nam Theun 2 reservoir is located on the Nakay Plateau, home to over 4000 people, and lies mainly in Khammouane Province intruding into Bolikhamxai Province to the north. It lies adjacent and to the west of the Nakay-Nam Theun National Biodiversity Conservation Area (NNT NBCA), an area classified by the International Union for the Conservation of Nature (IUCN) as one of significant global biodiversity value. Nam Theun 2 was the least cost per KW option of three possible dams, the Nam Theun 1, Theun Hinboun and Nam Theun 2, that the Interim Mekong Committee Study considered in 1985. That study was followed up by a feasibility study, completed in 1991 by the Snowy Mountains Engineering Corporation (SMEC) of Australia. The study was funded by the United Nations Development Program and the World Bank oversaw the studies. The studies	The BOOT consortium The role of the World Bank Design aspects The Nakay Plateau The Nakay-Nam Theun National Biodiversity Conservation Area
revealed serious environmental and social impacts. The reservoir and associated developments would create negative impacts on an area of high biodiversity concentration, and the proposed resettlement of 14 villages (later revised to 16 villages) presented difficulties in terms of the availability of fertile agricultural lands where villagers would be able to resume their preferred livelihoods. These studies received much criticism from outside of Laos about the lack of consultation with the villagers over the planning of the hydro project and the environmental and social impacts that it would create.

      Photo: Satoru Matsumoto

      A captive rare and endangered Saola
      captured from the NNT NBCA.

Following this study the project was shelved by the Government of Laos (GoL) in December 1991. However by 1993, the GoL had decided to embark on a massive drive to develop the country's hydropower resources into an export industry and it officially endorsed private sector participation in the development of the industry utilising the BOOT approach.

Following the endorsement, an Australian consortium called Transmec submitted a non-competitive bid for the Nam Theun 2 project. Transmec consisted of SMEC and Transfield a private Australian company recognised to be the leading BOOT developer in Australia and the joint venture developer of the first BOOT project in Indochina, the Tha Ngon Bridge, Lao PDR.

Nam Theun 2 was the first BOOT hydro project to have a Memorandum of Understanding (MOU) to develop signed with the GoL. Following the MOU, the Lao government asked the World Bank to consider financing the Government’s equity investment in the project and to assist the consortium as needed in financing and developing the project. The Bank advised GoL and the consortium that further studies needed to be carried out before the Bank could become involved in financing the proposed project. These studies began in 1993 and were completed by mid-1998 during which time the composition of the consortium had changed.

These studies into the social and environmental impacts, the economic aspects of the project, and the process behind the studies have been contested by various interested parties which have included international Non-Government Organisations (NGOs) based in Laos and overseas.

children.jpg (21825 bytes)
Photo: Andrew Wyatt

   Children from the village of Ban
   Don, a village located in the
   inundation zone slated for
   resettlement