IFC Backs Lao Hydropower Development Policy

Vientiane Times, 18 March 2013

The International Finance Corporation (IFC), a member of the World Bank Group, has entered into a partnership with the Ministry of Natural Resources and Environment to improve laws and regulations and their enforcement, and to implement integrated water resources management.

Deputy Minister of Finance Mr Santiphab Phomvihane and IFC’s sustainable business advisory manager for East Asia and the Pacific Mr Ian Crosby signed the US$2.4 million cooperation project in Vientiane. The project will run from now until 2017.

The partnership between the Lao government and IFC aims to ensure that hydropower will be developed and operated in sustainable ways that protect the environment and local people’s livelihoods. It will also support socio-economic development in the country.

Laos has the potential to build more than 100 dams on the Mekong and its tributaries with combined installed power of about 28,000MW. At present, the country has completed construction of only 17 dams with combined installed power capacity of only 3,000MW.

The government has committed to build hydropower in sustainable ways and use the revenue earned to reduce poverty.

“The partnership with IFC marks our commitment to promoting integrated water resources management and best practice environmental and social standards in the hydropower sector through revising laws and regulations as well as improving our capacity to enforce them,” Mr Santiphab said.

IFC and the World Bank have been helping Laos to revise its water and water resources law by providing consultation support and technical input to the Ministry of Natural Resources and Environment. This aims to ensure that the new law can meet the needs of all water users for many years to come.

Under the partnership, IFC will also provide training and technical assistance to the Ministry of Natural Resources and Environment and the relevant people in select river basins to help them better anticipate, evaluate, and manage the water resources in support of sustainable hydropower investments.

For example, guidelines on how to manage changes to the water flow in a river will be developed to meet the needs of all users and protect the environment.

“We want to share our expertise with and provide training to a wide range of stakeholders to raise the bar in the sector as a whole,” Mr Crosby said.

“It is our goal to increase the share of new hydropower projects that follow international best practices in Laos.”

IFC supports Laos in realising its economic growth potential through the development of sustainable and commercially via ble hydropower. It seeks to collaborate with local government agencies, international and local civil society organisations, finance institutions, and the private sector to enhance environmental and social standards in the hydropower sector.

IFC’s presence in Laos spans more than a decade. It provides loans, equity investment and advice to help the private sector become a key engine for sustainable economic growth, creating jobs, raising incomes, and reducing poverty.

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