The World Bank has granted Laos $15 million to help finance the construction of a power grid to facilitate exports of hydro-electricity to neighbouring Cambodia, the bank said Thursday.
"Under the World Bank's Greater Mekong Sub-region (GMS) Power Trade Program, a grant of $15 million to Lao People's Democratic Republic will support the construction of lines to export power to Cambodia and help improve the supply of electricity to Saravan Province in the south of the country," said a World Bank statement made available in Bangkok.
Bank sources said the grant would be used to connect Cambodia to medium sized hydro-electric plants in Saravan Champasak province in southern Laos.
Hydro-electricity is Laos' main export and foreign exchange earner and will become even more important to the land-locked country in the near future upon the completion of the Nam Theun 2, a $1.45 billion, 1,070-megawatt hydropower project in eastern Laos, received World Bank and Asian Development Bank guarantees in March, 2005.
When completed, the project will export electricity primarily to Thailand, generating revenues of about $30 million per annum during the first ten years and about 110 million from 2020 to 2030.
The project was strongly opposed by environmentalists and human rights activists who noted the huge reservoir on the Nakai Plateau would open up virgin forests to encroachment, displace thousands of villagers and have unknown impact on downstream rivers and homesteads.
A recent study of the Nam Thuen 2 conducted by the International Rivers Network (IRN) concluded that the project was behind scheduled in several areas, including the resettlement of 6,200 indigenous people on the Nakai Plateau, the program to mitigate NT2's impact on tens of thousands of downstream villagers and compensation for villagers who have lost land and resources as a result of project construction.
The WB in a statement released Wednesday out of Washington DC acknowleged that some work still needed to be done in these areas.
"In the Nakai Plateau, 742 of the 1,216 affected households have already moved to their permanent resettlement sites and are benefiting from improved basic infrastructure," said the WB.
"Delays in completing the building of permanent houses are being addressed," it added.
The reservoir is scheduled to be flooded in June, 2008.