Lao - Nam Theun 2 Hydroelectric Project, Vol. 1 of 1
Document Type: Project Appraisal Document
The Nam Theun 2 Hydroelectric (NT2) Project seeks to generate revenues through an environmentally and socially
sustainable development of NT2 ' s hydropower potential. The project includes a) the installation of a hydropower facility that
will provide 995 MW power for export to Thailand, and an additional 75 MW for domestic use; b) management of
environmental and social impacts on the Nakai Plateau, in the NT2 watershed, and in the down-stream areas of the Nam
Theun and Xe Bang Fai (XBF) rivers; and, c) monitoring and evaluation arrangements designed to meet sound engineering
practices, fiduciary responsibilities, and the respective oversight requirements of the various financial institutions. The project
components are as follows. Component I - NT2 Hydropower Facility - comprises a dam (48 meters high) and a 450 km2
reservoir on the Nam Theun River and the Nakai plateau. Water from the reservoir would be transferred to an above-ground
power station, located at the foot of the Nakai escarpment. Component 2 - Management of Environmental and Social Impacts
- four areas are impacted by the project: a) the Nakai Plateau where most of the resettlement will occur; b) the NT2
watershed; c) the downstream area along the XBF river and its tributaries; and, d) the downstream area along the lower NT
river and its tributaries. The Social Development Plan (SDP) will be implemented, covering: design and construction of
resettlement villages, away from the inundation zone; provision of basic infrastructure and social services; and, design and
delivery of livelihood programs. The Environmental Assessment and Management Plan (EAMP) will include: environmental
mitigation measures on the Nakai Plateau and in the downstream areas; design and implementation of adaptive wildlife
management programs; water quality monitoring and management programs in the reservoir and downstream areas; flood
control measures; and, implementation of the riparian release measures. The watershed management includes the
preparation and implementation of land use plans in a participatory manner, design and implementation of programs to
prevent loss of forest cover, wildlife trade and non-sustainable resource use, and, compensation for livelihood impacts due to
resource access restrictions. Component 3 - Monitoring and Evaluation - the monitoring and evaluation (M & E) framework
consists of: a) supervision of physical implementation of the hydropower project by professional engineering firms; b)
independent review of key project components - dam safety and environment and social impacts; c) systematic monitoring of
the technical, and environmental and social safeguards components o f the project during construction, and operation by a
professional firm; and, d) advisory services on project implementation, including NT2 revenue management arrangements. A
mitigation assessment was conducted on key implementation risks, and mitigation measures stipulate the actions to be
taken.