November 14, 2006 – Take a walk through Sop Ma, a village in the  | | New villages, including Sop Ma and Sop On, are springing up, with new houses, schools and improved living standards |
Nakai Plateau in the central region of Lao People’s Democratic Republic… You are standing on a dirt road. It’s a hot, humid day. To your left and right, new houses are being constructed. There are children running around, playing with tires on a stick while their parents look on. If you look straight ahead, you’ll see a village springing up—a school on your far right, some vegetable gardens farther on your left... Something is happening in Sop Ma. New Houses, New Lives After nearly ten years of studies, household surveys, and consultations—assessing villagers’ preferences on location, village layout and household structure, among other things—the Nam Theun 2 (NT2) hydroelectric project got underway in April 2005 and, since then, almost 600 households in eight out of 17 villages in the Plateau that will be relocated, including Sop Ma, have resettled to their new sites. The new villages are undergoing construction and people are already benefiting from improved living conditions, including community wells, small vegetable plots, access roads, food support, health programs, schools and nurseries as well as temporary housing with watertight roofs and toilets, while the new houses are completed. The remaining villages will move during the current dry season, from November 2006 to April of 2007.  | | As construction progresses, it is essential that it remains aligned with social and environmental programs |
As part of livelihood development activities, people affected by the construction are learning new techniques in fishing, forestry, livestock management, weaving, education, and health. These activities aim to, among other things, mitigate potential losses in rice crop production and raise villagers’ income. “One major constraint to agricultural livelihoods is the lack of arable land suitable for rice production, one of the most important crops for Lao communities,” observed Richard Chisholm, World Bank Agriculture Specialist in a recent visit to the project site. “However, the Nam Theun 2 Power Company (NTPC) has developed a sound system for the poor soils, based on intensive studies and research, that will help ensure that the people affected actually see their livelihood options enhanced…In addition there is also potential to use lands exposed in the dry season, for rice and other crops.” Throughout the next couple of years, it will be important for the Bank to follow up with villages and see how they are adapting to the new agricultural system.  | | In Ban Lao, a village in the Project Lands, consultations are taking place to verify compensation payments and address grievances |
Impact on Other Villages The people living on the Plateau are not the only ones affected by the NT2 project. Villages in the “Project Lands”, where land has been acquired in order to build roads and the downstream channel, among other things, have agreed to give up parts or all of their land and receive compensation. However, compensation payments in this area have been delayed. “This is currently receiving high priority from the Government, NTPC and the financial institutions,” says Chaohua Zhang, Task Team Leader of the Nam Theun 2 Social and Environmental Program (NTSEP), a $20 million IDA grant that funds specific activities for environmental and social protection in the project. “In response to complaints in terms of compensation payments, the Government and NTPC are reviewing the process to address any grievances, and the Bank is closely following up on this.” In the downstream areas, along the Xe Bang Fai basin, villagers will be affected by the diversion of the Nam Theun River. In response, livelihood restoration programs have commenced in 21 villages and will be eventually scaled up to 168 villages.  | | People undergoing resettlement in the Nakai Plateau are benefiting from improved living standards, including community wells |
Monitoring and Oversight Remain Critical In March of 2005, when World Bank and Asian Development Bank support for the project was approved, the institutions made a commitment to supervise the project closely and report regularly to their Boards of Directors on its implementation. Their latest report, released on November 3, noted overall satisfactory progress but highlighted key areas of concern that the institutions must follow closely. “At this point remaining engaged in project monitoring, working with the Government and NTPC to identify issues and to find solutions that mitigate impacts, is the most valuable contribution we can make,” says Patchamuthu Illangovan, Country Manager of Lao PDR. The Bank’s team working on NT2 draws expertise from the energy, environment, social development, and rural sectors in the SDN network, as well as PREM and communications. “This is a complex project—something we’ve acknowledged from the beginning, and perhaps for that reason it’s a project that has the potential to impact the Lao people in very profound ways,” added Mr. Illangovan. “Not only are essential social and environmental mitigation measures being implemented, the Government is also undergoing a significant reform process that will allow them to effectively manage the resources once revenues start flowing.”
| Update on Nam Theun 2 Project in Lao PDR To build Nam Theun 2, a $1.45 billion, 1,070 megawatt hydropower project, about 6,200 people in the Nakai
Plateau—where the reservoir is being developed—are being relocated. The project has benefited from an unprecedented level of consultations in Lao PDR, a process undertaken by the Lao Government and the project developers, the Nam Theun 2 Power Company (NTPC). In 2004 the World Bank hired an independent consultant to oversee the process and ensure that it was balanced, transparent and meaningful. The World Bank is supporting the NT2 project through IDA grants and IDA and MIGA partial risk guarantees, because—if properly managed—it will generate much-needed revenue over the long term for poverty reduction efforts in Lao PDR, one of the poorest countries in East Asia. All ten World Bank environmental and social safeguards have been triggered by this project, and the Bank has worked very closely with the Government and the developers to ensure improved living standards for the resettled people, new livelihood opportunities for more than 60,000 people in the downstream areas, funding the protection of a 4,000-square kilometer bio-diversity area, and strengthening the country’s public finance management system. Nam Theun 2 involves three multilateral banks, three Export Credit Agencies, three bilateral financing agencies, nine international commercial banks, and seven Thai commercial banks. Visit the NT2 homepage for more information.
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