Mekong Forum on Water, Food & EnergyMekong Forum on Water, Food & Energy

13 - 14 November 201213 - 14 November 2012

“An industrial project and a development project, for poverty reduction in Laos”

Jointly implemented by NTPC and the Government of the Lao PDR

Nam Theun 2

Trans-Basin ProjectProject dams the Nam Theun River and diverts water to the Xe Bang Fai River

Key dates

2003: Signature of PPA

2005: Financial Close and began full construction

2010: Commercial Operation Date

2035: End of concession

Xe B

ang

Fai

Nam Theun

Mekong

Nam T

heun

Downstream Channel

PowerStation

NakaiDam

Cross-Border ProjectPart of 7,000 MW electricity export program between Laos and Thailand.

1,070 MW capacity - 95% of electricity sold to Thailand (3% of current consumption). The remainder will provide over 20% of Lao domestic electricity needs.

NTPC Set UpNTPC Set Up

• Protection of the 4000 km2 catchment area (National Protected Area) • Resettlement of 1,240 families on the Plateau and commitment to increase their

revenues• Activities with 200 villages in downstream areas to compensate for and mitigate the

impacts of the project

The Development ProjectThe Development Project

Scope of E&S Programs Scope of E&S Programs – Resettlement & Livelihoods for over 1300 HHs and 6,300 people

- Infrastructure (e.g. housing, water & sanitation facilites, roads, public buildings)- Many pillars (Forestry, farming, fisheries., livestock, etc. )- SE monitoring, institutional capacity building for improved resource management

– Downstream Program- Livelihoods support and infrastructure programs, monitoring (fish catch, erosion,

socio economic), compensation for lost riverbank gardens and reduced fish catch through shareholder based village credit funds and direct cash compensation for ~250 villages and 20’000 affected households

– Project Lands - Compensation for construction period disturbance and property loss, - Cash compensation, grievance, livelihoods, infrastructure (housing, Water &

sanitation facilities, etc.) for 2578 families– Public Health Support Program

- Public health support program in the resettlement area with focus on preventive, maternal and child health,

- Regional public health support program including downstream areas – Environment Program

- Construction design to minimize impacts, Site Rehabilitation programs , Wildlife and Forest protection, Water quality and Green House Gas monitoring, Environmental Education, EMU Technical Assistance

Long-term Environmental and Social Commitments

1993 2003 2005 2008 2009 2014 2035

+ Development Agreement

Concession and power purchase agreements

FinancingEnd of Concession +

Design and Engineering

Construction

Operation and Maintenance

Consultation and Design

+ Pilot ProgramResettlement Infrastructures

Res. Livelihood

Downstream Livelihood

Watershed Protection

Contractual

Technical

Environmental and Social

Broad Coverage Broad Coverage - Nam Theun Watershed

(4500 km2)

- Nam Theun river/Nakai Dam Downstream (~70 km)

- Nakai Plateau and reservoir (~470km2)

- Xe Ban Fai river basin ( Upper, Middle & Lower ), ~170 km

- 3 Provinces (Bolikhamxai, Khamouane, Savanakhet)

- 9 districts

c. 24,000 UXO discovered and removed – cost c. US$18m

Previous Living ConditionsPrevious Living Conditions

New Villages, New HopeNew Villages, New Hope

Livelihoods SupportLivelihoods Support

• Agricultural plots - 0.66 ha/household• Fisheries, with boats supplied by NTPC• Improved livestock techniques

Livelihoods SupportLivelihoods Support

Village Forestry Associationand off-farm income

Public Health ProgramPublic Health Program

Infrastructure / equipment / vehicles / medicine Training and capacity building (more than 1,000

people trained) Health education & awareness (more than 30,000

people involved) Public health monitoring and surveillance Nutrition studies underway

Downstream ProgramDownstream Program

Downstream of Power Station (Xe Bang Fai) – 159 villages• Increased of flow and degraded water quality • 71 riparian and 88 hinterland villages

Downstream of Nakai Dam – 38 villages• reduced water flow in the Nam Theun• fewer fish?

Upstream of Nakai Dam (water shed) – 31 villages• possible impact on migrant fishes• this region is being addressed with the WMPA

US$16m eight-year programme WASH, livelihoods, revolving fund, flood gates

Irrigation outlet on the Downstream Channel

Irrigation outlet near the Aeration Weir on the Downstream Channel

NTPC develops programs and builds government capacityGovernment progressively responsible for implementation

Next step: hand over

Project in TransitionProject in Transition

Environmental Mitigation MeasuresEnvironmental Mitigation Measures

1. Creation and funding of Watershed Management & Protection Authority2. Riparian Release and Constant Water Quality Monitoring3. Environmental Engineering and Rehabilitation4. Commitment to Cease Generation at Flood Point

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3

4

WildlifeWildlife ProgrammesProgrammes

• Wetland Construction & Vegetation Programme

• Invasive Species Programme

• Turtle Conservation Programme 424 individuals from seven species

captured/released Follow-up monitoring and training

• Wildlife Rescue Programme 268 individuals of 49 species

rescued/released 38 Large-antlered muntjac released Radio-collars & monitoring indicates

success of release

Red Muntjac fitted with radio-collar before release

Water quality and reservoir monitoring

Water quality of the reservoir and downstream Boreholes and water pumps Aquatic life (fish, invertebrates, algae) Green House Gases

Protected area: 4,000 km2 - largest in the Lao PDR

NTPC fund: US$46.5m over 31 years (including estimated inflation)

Watershed Management & Protection Authority

Power generation ceases when Xe Bang Fai flood point reached

2007 flood

Contributing to Poverty Reduction in LaosContributing to Poverty Reduction in Laos

Environmental & Social Programs – BenefitsEnvironmental & Social Programs – Benefits• For the Hydro-power Industry:

• The future of the hydropower industry depends on it. • Hydro development can only be sustained if the environmental & social impacts are mitigated

in an acceptable manner

• For the Host Country (also refer to previous slide):

• Appropriately managed E&S programs lead to increased opportunities and economic activity for the population, and hence tax revenues

• Lack of adequate resolution of E&S issues may force the host government to take undesirable steps or actions towards the project owner

• For the Shareholders:

• Access to more Projects in the future• Credibility as a serious & responsible owner of a hydro-power project leads to improved

acceptance by the general public, Governments and affected persons, which leads to additional opportunities for future projects / investments.

• Increased access to financial markets• Global lending institutions are increasingly taking in to account “responsible” development as a

criteria

Project Inauguration Dec 2010Project Inauguration Dec 2010

Managing Director of

World Bank

President of Asian

Development Bank

Prime Minister ofThailand

President of the Lao PDR

Secretary of State for

Foreign Trade France

Vice President of European Investment

Bank

President of Agence

Francaise de Developpement