Compensation for affected villagers and funding for environmental management are playing a key role in the Nam Ngum 5 hydropower project.
The project has set a budget of more than 1.7 billion kip (over US $198,000) for compensation and more than 11.9 billion kip (over US$1.4 million) for the implementation of its environmental management plan.
The project is a joint investment by Sinohydro Corporation Limited and Electricite du Laos (EDL), and is located in Phoukhoun district, Luang Prabang province, about 300 km north of Vientiane.
General Manager of Nam Ngum 5 Power Company Limited, Mr Zhong Haixiang, told Vientiane Times the only impact from the project development would be faced by people living in Chim village, Phoukhoun district.
Forty-nine families in this village will lose farmland totalling about 50 hectares, which includes paddy fields belonging to 49 households.
These will be inundated in the creation of the reservoir.
The project's survey on land use types within and around the project area found most was grassland (more than 1,600 ha) and permanent farmland.
According to the project, compensation will be in the form of a payment for the value of the property concerned. The joint venture has a formula to use for calculating compensation for the permanent loss of land.
Compensation is specifically offered for the recompense of those losing rice paddy fields and permanent farmland and market gardens, and has so far been seen as satisfactory for both the project operators and the villagers affected.
Although the impacts of the Nam Ngum 5 hydropower project on fishery are expected to be minimal, it is clear that some mitigation measures will be made as agreed in the Environmental Impact Assessment (EIA) report approved by the Lao government.
As precise forecasts of such impacts are notoriously difficult to make, it is essential to continue monitoring for at least five years.
The Fisheries Department will be responsible for carrying out monitoring, with the project to provide financial support, Mr Zhong said.
There may be a need to have periodic independent expert reviews of the monitoring results to determine seasonal and long-term variations in fish stocks prior to the impoundment.
Such reviews could indicate if a modification in methods or monitoring frequency is needed.
They also serve to validate and certify baselines which could otherwise become highly contentious as the project develops.
If, during dam construction or operations, a development occurs which appears to affect downstream fishery, or which could be expected to do so, additional and more extensive fishery surveys to assess the extent of impact and to establish the level of compensation will be organised.
According to consultations with local authorities during the EIA survey, it seems the villagers strongly favour having a secondary school to prevent their children dropping out after finishing primary school.
The project will make an effort to fund construction of a secondary school in the area.
In addition, the project will improve access to health services, with funding for both facilities and staffing.
Mr Zhong said the project will also provide technical assistance for local people in extension work and market promotion, and to improve the skills of local people.
The project will give advice on the management of village forestry and promote the raising of livestock.
The project is under construction, with completion of the plant expected within 48 months.
Construction began in 2008 with a total investment of US$200 million. Commercial electricity generation is expected to begin in September 2011.
The dam is being built on the Nam Ting River, one of the main tributaries of the Nam Ngum River.
The project is a component of the power development strategy adopted by the Lao government to boost generating capacity to meet rising demand domestically and throughout the region.
