Hydropower and sustainable development: a case study of Lao PDR

Abstract

Lao People’s Democratic Republic (PDR) has large hydro-power potential with estimates varying from 18,000 MW to 30,000 MW, out of which only two percent (667,5 MW) has been developed so far. Despite the fact that the hydropower sector has played a pivotal role in the economic development of Lao PDR, planning, selection and implementation processes for hydropower projects have tended to be ad hoc in character, have experienced insufficient transparency and have not delivered the full potential benefits to the development of the country. Whereas substantial improvements in policies, legal requirements and assessment guidelines have occurred, hydropower planning and development still need a lot of improvement. Some major problems relate to capacity and institutional environment, such as insufficient quality of environmental and social assessments, ineffective regulatory framework, a lack of transparency, and the failure to conduct comprehensive consultations with all stakeholders. Hydropower development in Lao PDR and in the whole Mekong Region needs to be sustainable, which will require minimal adverse social and environmental impacts, while remaining a viable, profitable and source of renewable energy supporting the country’s economic development. Hydropower development should also better respond to the realities of regional energy market. Hydropower must be developed cautiously in the context of broader development goals, including responsible environmental management, institutional development, poverty alleviation and social development along with integrated water and energy management. Sustainable development of hydropower requires the integration of economic and social development and environmental protection and the need to take into account the values of efficiency, participatory decision-making, sustainability, accountability along with precautionary approach to environmental management and eco-efficiency. The purpose of the paper is to identify key challenges related to sustainable hydropower planning and development in Lao PDR. The paper aims to www.witpress.com, ISSN 1743-3541 (on-line) WIT Transactions on Ecology and the Environment, Vol 131, © 2010 WIT Press Environmental Economics and Investment Assessment III 199 doi:10.2495/EEIA100171 contribute to the broader discourse on sustainable hydropower planning and development in developing countries.