The Luang Prabang dam site when looked from the sky. Credit: MRC

Power purchase deals endorsed for Luang Prabang and Pak Lay dams on the Mekong amid locals’ bids to seek “legal rights” for better protection of the river

The endorsement drew flak among riverine communities, who immediately called for a probe into the government’s decision for fears of further transboundary impacts

The National Energy Policy Council (NEPC), chaired by Prime Minister Gen Prayut Chan-o-cha, on Wednesday was reported to and had acknowledged the core content of the draft Power Purchase deals for Luang Prabang and Pak Lay dam projects located on the Lower Mekong during its fourth meeting in this year.

The projects are the fourth and the fifth proposed on the river section that are now explicit to go ahead following the PPA endorsement_after the first Xayaburi dam and the second Don Sahong dam, both of which have drawn much controversy for their alleged destruction over the river’s ecosystems.

Energy Minister and Deputy PM Supattanapong Punmeechaow said the council at the same time also assigned the Electricity Generating Authority of Thailand (EGAT) to seal the deals with the developers of the dams.

The draft PPAs have been examined by the Council of the State already, he further said, adding if there are any amendments including work timetables as well as “milestones” in relation to power distribution without compromising the purchase rates agreed upon, the organization’s panel can make a decision on its own over the matters.

The decision over the power purchase deals was made by the council along with other critical decisions including the delay to discharge some old power generation plants at Mae Mo in Lampang province to help stabilize the fluid energy shortage due to current multiple crises.

PM Prayut was quoted as saying during the meeting that he wanted concerned agencies to look for alternative and renewable energy sources to maintain the country’s energy supplies and “there must not be short of power” in the country. He instructed the agencies not to cause repercussions against the government policy on carbon neutrality while seeking such energy sources. These sources must be subject to serious pursuits and studies for their potential, he cited. Hydropower is considered by the committee as one of such energy sources, according to their past meeting records.

During its last meeting in May, the council also acknowledged the draft PPA for the Pak Beng dam project, the third in the line, which is strongly opposed by riverine communities in the north due to its relatively close proximity, only around 100 kilometers from the Thai-Lao border in Chiang Rai province. No assignment of the deal signing was reported.

Where is the river’s “legal rights”?

The NEPC’s decision came as representatives of the Mekong riverine communities as well as those from its tributaries gathered at the same time, Wednesday afternoon, to seriously discuss the best way out to protect the Mekong River and its tributaries following their direct experiences and lessons learned about the dam impacts on these rivers.

New ideas concerning “legal rights” and “legal personhood” were shared and explored among the participants both on-site and online during the forum, Can the Mekong and its tributaries have “legal rights”?, raising hopes that such new legal concepts and tools could provide better protection to the rivers, which over the years have been deteriorated by the mega-construction projects without proper protection by any current legal frameworks and mechanisms. (Watch a recording

“Power purchase continues as it does, and so do corporate investments and benefits, something that the law can never catch them up,” said Ms. Ormbun Thipsuna, Secretary-General of the Network Association of the Mekong Community Organizations Council of the Seven Northeastern Provinces, who had joined the forum and posted in her Facebook account upon learning about the government’s decision.

Her group yesterday joined other Mekong communities under the name of the Thai Mekong People’s Network From Eight Provinces in inking a petition to be submitted to the Parliament’s public participation and political development sub-panel to ask for an immediate probe into this government’s decision. They cited the main reason that it lacked public participation in such critical decision-making while transboundary impacts from the Mekong dams are already clearly observed and experienced by the communities downstream without being properly addressed up until this point.

“This is for accountability, transparency, as well as public participation to be promoted as they are supposed to, “said the group in their letter.

Updated/ June 25: They also submitted the petition to the PM himself asking him to look into the decision made.

The video clip introducing the dam project by the MRC. Credit: MRC

The fourth and the fifth dams

The Pak Lay dam project was proposed as the fourth in the line for the regional consultation mechanism provided by the Mekong River Commission (MRC) in mid-2018. It is planned on the Mekong mainstream in Pak Lay district in north-western Lao PDR’s Xayaburi province, around 100 kilometres downstream of the Xayaburi dam and around some 60 km from the Thai-Lao border in Loei province.

The dam will be run-of-river, operating continuously year-round to produce 770 megawatts of electricity, according to the MRC. Power China Resources Ltd. was first named as its developer with the investment cost estimated at US$ 2,134 million. The construction is set to start this year and the commercial operation would begin when the construction finishes in 2029.

On June 13, 2018, the Lao government notified the MRC Secretariat of its intention to undertake the so-called Prior Consultation for the project.

Under the MRC’s procedures, any infrastructural project “using the mainstream water during the dry season within the same basin”, as well as “during the wet season between two basins”, must undergo the prior consultation process.  Applicable projects include large-scale irrigation and hydropower development which may cause significant impacts on the environment, water flow and quality of the Mekong mainstream. 

As the procedures is clearly aimed to allow concerned parties to come to an agreement on how the consulted case should proceed, and as stressed by the MRC itself, is not meant to approve or disapprove the proposed project, it is generally perceived that the project has implicitly started accordingly.

During the wrap-up of the 6-month consultation, which ended in April 2019, the four-country members of the MRC had called on Laos through the official statement “to make every necessary effort to address and mitigate potential adverse cross-border impacts of the project” by taking into account recommendations provided in the Technical Review Report resulted from the consultation process.

“We found that it (Pak Lay project) is needed for further identification of the transboundary environmental impacts considering great assessment and proper mitigation plans and measures,” Cambodia’s Reply Form read.

Thailand also shared similar comments, asking Laos to pay special attention to “potential socio­economic and environmental transboundary impacts from the proposed project to affected communities in eight provinces of the country”, the MRC noted.

Viet Nam, in addition, suggested Laos to invest more time and resources on additional data collection and improvement of applied impact assessment to address possible impacts across borders in “a more comprehensive manner”. It also recommended the development of “a comprehensive program for monitoring the impacts of the project during construction and operation stages”, according to the MRC.

The project also came up with a new mechanism to deal with possible impacts of the dam during the construction and after the operation. It’s called a Joint Action Plan, which lies up measures for the post-prior consultation period and mechanisms for ongoing feedback, data exchange, and knowledge sharing between the developer and the MRC and stakeholders concerning the ongoing design, construction and operation.

The JAP was first developed during the consultation for the thirdly proposed dam project of Pak Beng.

“The purpose is to enhance existing measures to avoid, minimize and mitigate the potential for transboundary impacts, and to enhance the benefits of the projects and the sharing of knowledge and experience amongst the member countries,” according to the MRC when addressing the benefits of the JAPs of Pak Beng and Pak Lay.

The 1,285-MW Xayaburi and 240-MW Don Sahong dams have no JAPs.

The graphic of the Luang Prabang dam design. Credit: MRC

The Luang Prabang dam, meanwhile, is the fifth project that was put forward to the MRC’s prior consultation in October 2019. According to the MRC, the Luang Prabang dam has been developed by the Luang Prabang Power Company Limited, a company established by the Lao government and PetroVietnam Power Corporation under their 2007 MOU.

Located around 25 km north of Luang Prabang town, the project will have an installed capacity of 1,460 MW, generating power set to be sold to Thailand from 2027 onwards, the MRC cited information provided in the notification documents.

During the wrap-up session of the prior consultation for the Luang Prabang project, which ended in June 2020, it was reported that Thailand, Cambodia, and Viet Nam had requested Lao PDR to conduct “rigorous” transboundary impact assessments and enhance proposed measures to mitigate potential adverse impacts from the proposed dam.

While appreciating the Lao government’s submission of the project for prior consultation and its cooperation, and recognising Lao’s sovereignty and rights in making a decision towards the dam development, they had requested that Laos take “due account” of their recommendations outlined in their Official Reply Form, the MRC noted.

For instance, Cambodia called for further transboundary environmental impact assessments to be conducted, considering proper and effective mitigation plans and measures. And Vietnam said; “The cumulative impacts of the Luang Prabang Hydropower Project and all the Mekong mainstream hydropower projects should be comprehensively assessed.”

Thailand, meanwhile, said; “There is a proposal to Lao PDR and project developer to establish an Endowment Fund and determine transboundary impact mitigation measures in terms of socio-economic, livelihood and environment.”

The MRC noted that some 26 villages with over 2,000 households and 10,000 inhabitants will be directly affected by the project. Credit: MRC

In March last year, Xinhua reported on the progress of the Luang Prabang project and that its preparatory work was already 80 per cent complete. Among the preparatory work was the construction of an 11-km access road, a 500-metre bridge over the Mekong River, three temporary ports, as well as some transmission lines and a small electricity station.

About 69 per cent of compensation payments to people who had to give up their land or other property to the project were also already made at that time, according to Xinhua.

And in April this year, the Chinese company was reported to have begun to prepare for construction on the Pak Lay dam, an official at the Energy and Mines Department of Xayaburi province told Radio Free Asia.

The developer has been preparing to build an access road, a workers’ camp, and a power source at the site since late 2021, RFA was told by the same official who declined to be named. The pre-construction phase was moving ahead, but Laos and the company’s officials had not yet met with the residents who have been potentially affected by the dam, RFA reported as told by the same official.

This is similar to the Pak Beng dam, the third in the line. China Datang Overseas Investment, the developer of the Pak Beng Dam, was reported by the same news agency that it began moving machinery to prepare the dam site and to set up workers’ camps in this same month. An official at the Lao Ministry of Energy and Mines told the agency that this was in anticipation of a PPA to be signed in May with EGAT.

In January and April, at least two Thai companies, CK Power Plc (CKP), the power generation arm of CH Karnchang Plc and Gulf Energy Development Plc were reported by the Bangkok Post as having been involved with the project either as a constructer or a co-developer of the projects.

They both claimed “clean energy” and “carbon neutrality” promotion as the reason to join the projects.

The Mekong dam status as of July 2020. Credit: MRC