Power agreement hastens timeline for Laos’ Pak Beng Dam

Construction can begin, but compensation for villagers remains unresolved.
By RFA Lao
Power agreement hastens timeline for Laos’ Pak Beng Dam Laos is planning to build a dam on the Mekong River in the area of Pak Beng, shown in this Oct. 15, 2022 photo, in Bokeo province.

Communities on both sides of the Mekong River are expressing concerns after developers of a controversial dam in Laos signed a power agreement with Thailand even though compensation for villagers impacted by the project remains unresolved.

The Pak Beng Dam in northwestern Laos’ Bokeo province is an integral part of the country’s goal to become the “battery of Southeast Asia” by using the Mekong to generate electricity and selling it to neighboring countries.

On Sept. 13, Pak Beng Dam developers inked a power purchase agreement, or PPA, with the Electricity Generating Authority of Thailand, or EGAT, which will allow construction to begin once it issues a report on the social impact of the project, an official from Thailand’s ministry of energy told RFA Lao.

“Now that EGAT has signed a PPA with dam developers, they have to file a report detailing any cross-border impacts and set up a fund to pay compensation to affected villagers, at which point construction can begin,” said the official who, like others interviewed for this report, spoke on condition of anonymity because they were not authorized to speak with the media.

An official from the Lao ministry of energy and mines went further, telling RFA that with the power agreement out of the way, developers “can build the dam right away.”

He urged them to speed up construction of resettlement communities for the more than 4,700 inhabitants of seven villages that will be uprooted to make way for the project.

“Resettlement communities for those whose villages will be inundated should be completed before the dam is built,” he said.

The Pak Beng Dam is one of three Mekong River mainstream dam projects that have completed review processes and are eligible to begin construction. Two others, the Xayaburi Dam and the Don Sahong Dam, are currently operational. Four more proposed projects are in various stages of planning.

The US$1.88 billion, 912-megawatt dam – a joint investment between China’s Datang Overseas Investment and Gulf Energy Development of Thailand – is the fourth-largest dam the Lao government has planned for the Mekong River. Per last week’s agreement, 95% of the generated electricity will be sold to Thailand, while the remainder is earmarked for Laos.

In total, 26 villages in Laos will be affected by the project, as well as a handful in Thailand.

Compensation issues

Critics of Laos’ hydroelectric pursuits point to the environmental and social impacts associated with the large-scale mainstream dams, and a chief complaint is that the dams will displace people and ruin the livelihoods of river-based communities. 

A villager from Pak Beng district told RFA that he wants the Lao government to abandon the project because he believes that it won’t benefit the public and will destroy the environment, which people in the area depend on for their livelihood.

“We’ve heard that [the developers] will provide compensation for us, but we villagers will no longer have a way to earn a living [when the dam is built],” he said. “The project is going to make poor villagers even poorer because we will no longer be able to use boats to trade along the Mekong and we won’t have any fish to catch.”

Another villager told RFA that he and others don’t want to relocate because they are afraid that they won’t be given land to grow crops to sell at the market.

However, he acknowledged that his understanding of the project and plans for compensation was limited.

“We are concerned about the dam,” he said. “We heard what [the authorities] said, but we don’t know what they will do with us and if we move we don’t know how we’ll be able to earn a living.”

In addition to acceptable resettlement communities, villagers living near the site where the Pak Beng will be built have demanded 150 million kip ($8,850) per hectare (2.5 acres) for their land.

An official from Gulf Energy Development of Thailand, one of the investors in the Pak Beng Dam, told RFA that villagers have nothing to worry about.

“The power purchase agreement has been signed, so if there are no further problems, the company can start building the dam,” he said. “The affected villagers are unable to read, so they just don’t understand the process.”

Why the rush?

In March, authorities in Bokeo province’s Pak Tha district spoke with villagers about compensation rates for land, homes, fruit trees and other crops and said they would need to gather additional information before they could pay out compensation.

An official with the ministry of energy and mines said at the time that compensation would be based on “the actual social and economic situation in the area and on the same policy that was used for the Xayaburi Dam project.”

Though the Xayaburi dam was completed and went into operation in 2019, RFA reported two years later that displaced villagers still lacked farmland and access to water.

Meanwhile, representatives of eight Thai provinces along the Mekong and the Love Chiang Khong group, which has lobbied against mainstream dams on the river, issued an open letter to Thai Prime Minister Srettha Thavisin and Thai Energy Minister Siri Jirapongphan calling for an immediate cancelation of the Pak Beng power agreement.

“We don’t understand why it’s so urgent to sign a power purchase agreement when so many stakeholders are still discussing the project,” said one of the letter’s authors. “It’s a big and sensitive issue on cross border impact, so they shouldn’t make any hasty decisions.”

He called on affected villagers to make sure they understand the terms of the project before they agree to proceed. 

Translated by Sidney. Edited by Joshua Lipes and Malcolm Foster.


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