ADB said that US$400,000 had been approved in technical assistance funds to ensure the effective implementation of livelihood programmes in areas affected by the 1070MW project.

The funds follow earlier loans totalling US$100M given as private funding and as a political risk guarantee, and also a previous loan of US$20M.

Reservoir impoundment began last month following a World Bank report’s clearance for preparatory works. The interim progress report, published in February, noted that most resettlement had been done, a draft plan for fisheries had been submitted and an emergency contingency plan also had been done.

Following that work, and the implementation of a water quality monitoring programme, the vegetation clearance work and the final stage work on the plan for mitigation and compensation to villagers, the closure of the diversion tunnel was approved.

Nam Theun 2 is being developed on the Nam Theun river and with a 39m high dam to impound a reservoir that gives a head of 350m over the powerhouse. The majority of the electricity will be exported.

Project sponsors include Italian Thai Development Public Co (ITD), edf Internatinaland the government of Lao PDR. The development company, Nam Theun 2 Power Co, has a 31-year concession – including 25 years of operation. Under the concession agreement, Lao PDR will earn income from taxes, royalties and dividends.