Hydroelectric Power Concerns in Laos

Written by Kyle Hosey

Laotian and Thai authorities and Chinese power company Sinohydro have recently finalized another hydroelectric power dam agreement along the Mekong River in Laos. The Pak Lay project is one of nine mega-dams planned by the Laotian government as part of its strategy to become the “battery of Southeast Asia,” though only two have come online so far. Sinohydro will reportedly assume a majority 60% stake in the project, with Thai companies taking the remaining 40%, with the entirety of energy production to be sold to Thailand once construction is completed (expected in 2029).

However, Laos’s dam projects have raised concerns inside and outside the country. There are, naturally, worries about the possibility of Chinese “debt trap diplomacy” driven by China’s large stakes in the projects. Others worry that dam construction has become untethered from actual economic policy and exists more to funnel money to favored construction and investment companies. But some of the loudest concerns have surrounded the project’s environmental impact. Pak Lay is estimated to displace 3,500 people near the future dam, and future mega-dams will likely displace more. The dam is also controversial due to its potential impacts on the river itself; the lower half of the Mekong has experienced record-low water levels in recent years, which environmental watchdog groups say is partly caused by the rapid construction of dams like Pak-Lay on the river. A separate dam project near Luang Prabang, an ancient citadel designated as a UNESCO World Heritage site in the north of the country, has raised other serious protests about the dam’s impact on the region’s ecology, particularly its location less than 10 kilometers from a seismic fault.