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Last Updated: Friday, 1 April, 2005, 06:29 GMT 07:29 UK
World Bank backs Laos dam project
By Simon Montlake

The World Bank has agreed to back a controversial hydroelectric dam project in Laos, one of the poorest countries in South East Asia.

At its board meeting in Washington, the bank said it would provide loans and guarantees for the $1.2bn project.

The decision comes after nearly 10 years of discussions with the Laos government.

But critics say the environmental and social costs of the dam, called Nam Theun 2, are far too high.

Laos is a poor, landlocked country which has few viable industries.

But it does have plenty of mountains and rivers, and that is why it is pinning its hopes for the future on hydroelectric power.

Nam Theun 2 is the country's largest dam project, on a tributary of the mighty Mekong.

It is designed to produce electricity for export to neighbouring Thailand, earning valuable foreign currency that Laos says it will use to alleviate poverty.

But critics are not convinced. They say the dam will damage the environment and undermine the livelihoods of tens of thousands of local villagers.

For the World Bank, the dam is also risky. In the past, it has faced a massive outcry after backing similar dams in other developing countries.

The bank says this time it is confident that the dam's benefits will outweigh the negative impacts.

Southern Laos braces for change
16 Jun 04 |  Asia-Pacific

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