The World Bank has approved a one-point-three billion dollar hydro-electric project in Laos, after a decade of deliberations. The dam will potentially bring great economic benefits to the Laotian people, but as Ron Corben reports from Bangkok, environmental groups fear social and environmental costs will outweigh benefits.
The decision by the World Bank's 24-member board makes the Nam Theun 2 dam the the first major hydroelectric project the bank has approved in the past 10 years.
The project on the Nakai Plateau in central Laos will dam the Nam Theun River, which flows from the mountains near Vietnam to the Mekong River. It is expected to flood 450-square kilometers of land once construction is complete in 2009, and more than six-thousand people are due to be relocated.
Water from its reservoir will generate one-thousand megawatts of electricity - enough to light more than 750-thousand homes. The plan is for Laos to sell most of the power to neighboring Thailand to fuel the booming economy there, earning 80-million dollars, or one-fifth the current Laotian budget.
The funds are said to be earmarked for such areas as health and education for the Laotian people, who with an average per-capita income of only 300 dollars a year, are among the region's poorest.
But the project is controversial. Environmental groups have predicted that the costs from the project will outweigh any benefits.
The U.S.-based Environmental Defense League has called the dam a "high-risk, low-reward" project that will have "questionable economic justification" and "severe negative impact" on the people and the environment.
But some other environmental groups have said they can support the project, provided independent agencies can ensure that the power company and the Laotian Government meet their to pledges improve people's lives.
Listen to our Laos in the News report for detail.