The tunnel was officially closed in a ceremony that took place at the Nakai dam site in Khamkeuth district, Borikhamxay province, Lao PDR in the presence of Mr. Somsavat Lengsavad, Standing Deputy Prime Minister of the Lao People's Democratic Republic.
This closure will result in the flooding of 80sq km of land and is the first step in the process of impoundment: The dam gates are scheduled to close in June 2008.
Deputy Director General of the Department of Energy Promotion and Development Mr Sychath Boutsakitirath said the tunnel closure represented an important milestone in the development of hydropower in Lao PDR.
"This step toward the final completion of the NT2 project is one we have been anticipating with some enthusiasm, as it means the project is well on track and impoundment can begin this wet season," he said.
"We are delighted with the progress of the project as it represents a vital contribution to the Lao economy and the Lao people and will playa substantial role in helping the Government meet its poverty alleviation goals."
The tunnel was built to divert the Nam Theun river around the dam construction site so water flow could be better managed during the construction phase. Water will now be released through the dam gates.
The Nam Theun 2 project is 85% complete and on schedule for its planned start of operation in 2009. Commissioning of the Nam Theun 2 hydropower plant is set for the beginning of March 2009 and commercial operations will commence in December 2009.
The tunnel closure follows the agreement by an independent international Panel of Experts (PoE) late last week that the project operators and the Lao Government had met their obligations in the Social and Environmental Management Framework and Operational Plan. In January the PoE outlined several key areas it suggested needed addressing before the tunnel closure and its latest report says it is now satisfied that these requirements have been met or are sufficiently far advanced. The report made special comment that completion of the necessary tasks had been achieved much faster than the panel had anticipated; in fact the PoE noted that the rapid and effective responses by the Lao Government and Nam Theun 2 Power Company (NTPC) had indeed been impressive.
Recommendations included successful resettlement of all affected people, establishment of a reservoir management committee, completion of essential infrastructure and housing, removing of the reservoir biomass, establishment of fishing and agriculture rights, livestock replacement and a protein provision program for 37 villages below the dam.
The PoE, which has been involved in monitoring the Nam Theun 2 hydropower project since 1997, has filed 14 reports to date and they have constantly referred to the Concession Agreement that underpins the project, highlighting the importance of this agreement in achieving the social and environmental outcomes being pursued. The three-member panel routinely submits its findings to the Ministry of Energy & MInes, at the same time referring recommendations to the NTPC where appropriate.
It has stated that it believes NT2 has the potential to be a world class model of a large scale project that could benefit the nation, the people and the environment.
With its installed capacity of 1070 MW, NT2 is the largest hydropower project to be constructed in Lao PDR to date. It is a joint investment between the Government of Laos and foreign investors in the form of a build, operate and transfer (BOT) project. Nam Theun 2 Power Company Limited (NTPC) was established under Lao PDR law, being the owner of the Project. Shareholders are the Lao Holding State Enterprise (25%), Electricity Generating Public Company Limited (25%), Electricite de France International (35%) and Italian-Thai Development Public Company Limited (15%). Financing involved 26 international banks including international financial institutions such as the World Bank, the Asian Development Bank, the European Investment Bank, and Agence Francaise de Developpement.
The bulk of the power generated by the project will be exported to Thailand but 75MW will be earmarked for Lao domestic use.
In the past, more than 6.000 poor peoples used to practice slash-and-burn activities in Nakai plateau. With the support of the Government and NTPC, they have learned new occupations on the basis of the sustainable utilization and management of natural resources. With regard to the Nakai-Nam Theun watershed management, the Project will provide 1 millions US annually to relevant government's agencies for 25 years. Those agencies will have the duty to protect the habitats of wildlife animals and the abundance of the biodiversity of the 4000 km2 Nam Theun 2 Watershed area. The released water from the plant will supply the irrigated areas covering thousand of hectares in Xe Bang Fay, Gnommalath and Mahaxai districts. During the construction phase, a large number of employments were created; technology was transferred thus generating an income of 5000-7000 people every year. Therefore, we can proudly say that apart from being an industrial and business project, the Nam
“Theun 2 project is also a development project that aims to reduce the poverty in Laos.
This project started its overall construction in mid 2005 after received the official support from the international financial institutions. Up to now, the construction has been conducted for 33 months out of the 55 scheduled months and the construction works are 85 % completed,” Mr Bosaikham Vongdara, Minister of Energy and Mines, said.
The Nam Theun 2 Project and the Lao Government have accomplished the implementation of the socio-environment programs (infrastructure construction, sustainable livelihood program for resettled people, downstream livelihood development program, the water sources protection and biodiversity program, the salvage logging programs) to be implemented fully in accordance with the conditions stipulated in the Concession Agreement. Last week, after accomplishing their mission conducted between 25 March -5 April 2008, the independent Panel of Expert on Environment or POE, who have been monitoring and assessing the project implementation so far, have agreed and supported the closure of the tunnel to be held on 10 April 2008 as planned.
The tunnel closure is the first step for reservoir impoundment before moving towards the closure of the dam gates in mid June 2008. The trial beginning of production in early March 2009 and the official beginning of production in December 2009 will constitute important milestones of the success of the Nam Theun Project construction.
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