Working Group on Laos Hydropower Sustainability Launched

The private sector lending arm of the World Bank says it has teamed up with business groups to ensure that hydropower projects are developed and operated in a sustainable way in Laos, which has come under fire from green groups for building dams with little regard for the environment.

Under the new partnership, and over the course of the next year, the International Finance Corporation (IFC) and the Lao National Chamber of Commerce will host a series of seminars to introduce hydropower companies to sustainability standards, tools, and best practices in a bid to get dam-builders to adopt them. 

The two sides signed a memorandum of understanding last week in Vientiane to launch the Hydropower Developers Working Group in a ceremony attended by representatives from the government, hydropower developers, and business and development partners. 

The IFC, which is a member of the World Bank Group, said in a statement that the collaboration is aimed at providing a “dialogue platform” between the business community and the government in Laos, which has more than 70 dams planned on its rivers. 

“By sharing our expertise on environmental and social best practices with the local hydropower companies, we want to improve the sustainability standards in the sector as a whole and increase the share of new hydropower projects that follow good international industry practices,” said Ian Crosby, IFC’s Sustainable Business Advisory Manager for East Asia and the Pacific.

Hydropower strategy

 Laos has said it wants to become the “battery” of Southeast Asia by selling electricity to its neighbors, prioritizing hydropower as a key way to promote economic growth and alleviate poverty. 

But environmental groups have raised concerns that the strategy is risky and that the projects often fail to protect local people’s access to the water resources they depend on. 

Green groups such as International Rivers have hit out at Laos for plowing ahead with construction on the Xayaburi dam, the first across the mainstream of the Lower Mekong River, without adequate study of its environmental impact. 

The dam, along with the Don Sahong planned near Cambodia in southern Laos, poses a regional security threat for the some 60 million people in Southeast Asia who rely on fish and other products from the Mekong for their nutrition and their livelihoods, environmental and conservation groups say.

IFC’s statement said the objective of the Hydropower Developers Working Group is to “ensure that hydropower projects will be developed and operated in a sustainable way that protects the environment and local people’s livelihoods.” 

Lao National Chamber of Commerce and Industry President Sisavath Thiravong said the project would help provide dam developers with the knowledge to better manage the sustainability risks of their projects. 

“The collaboration with IFC marks our commitment to developing a hydropower focused working group that channels the sector wide issues and challenges to the government,” he said, according to the statement.