UPDATE ON THE LAO PDR: NAM THEUN 2 (NT2) HYDROELECTRIC PROJECT - World Bank
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35736
UPDATE ON THE
LAO PDR: N A M THEUN 2 (NT2)
HYDROELECTRIC PROJECT
March 28,2006
ABBREVIATIONS A N D ACRONYMS
ADB
AfD
CA
COFACE
DSRP
EC
EdL
EM0
EMU
EPF
EU
FY
GLIP
GOL
GOLE
GPAR
HCC
IAG
IDA
IF1
IMA
IMF
INT0SA I
LE
LEnS
MDG
MDTF
MOF
NGO
NGPES
NFA
NSEDP
NT2
NTSEP
NTF¡¯P
NTPC
ODA
PDR
PEMSP
PER
PETS
PIP
POE
PRSO
REP
RMU
SA0
SEMFOP
SIDA
SNV
TA
UNDP
WB
WMPA
Asian Development Bank
Agence FranGaise du DCveloppement
Concession Agreement
Compagnie FranGais d¡¯ Assurance pour le Commerce ExtCrieur
D a m Safety Review Panel
European Commission
ElectricitC du Laos
Environmental Management Office
Environmental Management U n i t
Environment Protection Fund
European Union
Fiscal year
Government Letter o f Implementation Policy
Government o f Lao PDR
Government o f Lao Engineer
Governance and Public Administration Reform Program
Head Construction Contract(or)
International Advisory Group
International Development Association
International Financial Institutions
Independent Monitoring Agency
International Monetary Fund
International Organization o f Supreme Audit Institutions
Lenders¡¯ Engineer
Lao Environment and Social Project
Millennium Development Goals
Multi-Donor Trust Fund
Ministry o f Finance
Non-governmental Organization
National Growth and Poverty Eradication Strategy
National Protected Areas
National Socio Economic Development Plan
N a m Theun 2 Hydroelectric Project
N a m Theun 2 Social and Environment Project
Non-Timber Forest Product
N a m Theun 2 Power Company Limited
Official Development Assistance
(Lao) People¡¯s Democratic Republic
Public Expenditure Management Strengthening Program
Public Expenditure Review
Public Expenditure Tracking Survey
Project Implementation Plan
Environmental and Social Panel o f Experts
Poverty Reduction Support Operation
Rural Electrification Program
Resettlement Management Unit
State Audit Organization
Social and Environment Management Framework and First Operational Plan
Swedish International Development Authority
Stichting Nederlandse Vrij willigers
Technical Assistance
United Nations Development Program
World Bank
Watershed Management and Protection Authority
1
UPDATE ON THE LAO PDR: NAM THEUN 2 (NT2)
HYDROELECTRIC PROJECT
CONTENTS
I
.
I1.
Background and Summary Assessment of Progress...............................................................
1
A . Background .........................................................................................................................
1
B.
2
Summary Assessment o f Progress ......................................................................................
Country Development Framework .........................................................................................
4
A . Macroeconomic Situation and Structural Reform ..............................................................
4
B.
.................. 4
C . Donor Coordination and Emerging Issues .......................................................................... 5
I11. N T 2 Project Implementation...................................................................................................
6
A . Progress of Construction Activity ....................................................................................... 6
7
B. Environmental and Social Activities ..................................................................................
C . Complementary Investment Projects ................................................................................ 12
D. Project Revenue Management .......................................................................................... 14
16
E. Consultations, Disclosure and Stakeholder Engagement..................................................
F. Supervision, Independent Oversight and Reporting ......................................................... 17
Annex 1. N T 2 Final Project Financing Plan (June 2005) ............................................................
A1
Annex 2 . Government Letter of Implementation Policy .............................................................
A2
Annex 3 . Update from ADB on the Theun-Hinboun Project .................................................... A24
National Socioeconomic Development Plan and Poverty Reduction Strategy
Map. IBRD 34163R
..
11
UPDATE ON THE LAO PDR: N A M THEUN 2
HYDROELECTRIC PROJECT
I.
BACKGROUND AND SUMMARY ASSESSMENT OF PROGRESS
A.
BACKGROUND
The management of the World Bank (WB) and the management of the Asian
1.
Development Bank (ADB) have prepared this report together, in accordance with their
agreement to keep their respective Boards informed about implementation o f the Lao PDR Nam
Theun 2 Hydroelectric (NT2) project¡¯ through joint reporting on an annual basis, supplemented
b y semi-annual updates. In June 2005, an interim Update Report on implementation progress
was issued to the Boards of both Banks. This present Update i s the first annual progress report,
and presents project status and key developments since project approval. I t reflects the findings
and assessment of a recent joint management mission of the International Financial Institutions
(IFIs) concerned with the project.2
2.
The Government of Lao PDR (GOL) agreed to an implementation framework, set out
in the Government Letter of Implementation Policy (GLIP, 2005), to guide project
implementation. The GLIP was built on the Decision Framework that guided work during
p r e p a r a t i ~ n I. t~asserts GOL¡¯s commitment to: (i)
continue to build a viable development policy
framework and programs for poverty reduction and for social development and environmental
protection, using the National Growth and Poverty Eradication Strategy (NGPES) and the
National Socio Economic Development Plan (NSEDP) as drivers; (ii)focus on effective
implementation of the technical, financial and economic aspects o f the project, as well as o f the
environmental and social safeguard activities; and (iii)further strengthen support from the
international donor community and from global and local c i v i l society for poverty reduction
programs and associated development plans, and facilitate donor and civil society involvement
during implementation o f the N T 2 project itself.
3.
This Update provides an assessment, following the broad framework of the GLIP, of
progress regarding the country development framework and key aspects of NT2 project
implementation and partnerships. The GLP focuses on five areas in particular: (i)revenue
management; (ii)environmental and social performance outcomes; (iii)consultation and
participation; (iv) monitoring and evaluation; and (v) activities complementary to the N T 2
project. The Update pays special attention to progress in these areas and makes note o f emerging
issues. I t i s best read in conjunction with the final project financing plan and the GLIP, circulated
Approved by the WB¡¯s Board on March 31,2005 and by the ADB¡¯s Board on April 4,2005.
ADB, Nordic Investment Bank, European Investment Bank, COFACE, Agence FranGaise du DBveloppement
( A D ) and the International Development Association (IDA) participated in the mission, which took place February
20-24,2006.
establishing and implementing a viable development policy
The ¡°Decision Framework for NT2¡± called for: (i)
framework and program for poverty reduction and for environmental protection; (ii)ensuring that the technical,
financial, implementation, and economic aspects o f the proposed project, as well as the design and implementation
o f safeguards policies, are sound; and (iii)
obtaining broad understanding and support from the international donor
community and global and local civil society for Lao PDR¡¯s poverty reduction program and the proposed project.
1
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