Cumulative Impact Assessment for NN3-Laos

Technical Assistance Consultant’s Report
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and
ADB and the Government cannot be held liable for its contents. (For project preparatory technical
assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Project Number: 40514
February 2008



Lao People’s Democratic Republic: Preparing the
Cumulative Impact Assessment for the Nam Ngum 3
Hydropower Project
(Financed by the Japan Special Fund)

Prepared by Vattenfall Power Consultant AB
in association with Ramboll Natura AB and Earth Systems Lao


Stockholm, 29 February, 2008


To:
Asian Development Bank
The Director, SEID
Mr John R. Cooney
6 ADB Avenue, Mandaluyong City
1550 Metro Manila
Philippines





Re: PPTA TA4921-LAO Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project

Final CIA Report

Dear Sir,

Please find enclosed 10 hard copies and three CDs with pdf files of the main report and the
five appendices of the Final CIA Report for the above mentioned TA.

Yours sincerely,


Dr Bernt Rydgren, Team Leader
Vattenfall Power Consultant AB
Box 1842, SE-581 17, Linköping
Sweden
Phone: +46-70-3160920
E-mail:





TA 4921-LAO: Preparing the Cumulative Impact
Assessment for the Nam Ngum 3 Hydropower Project
Components A, parts 1 and 2

Final CIA Report

Main Report

February, 2008

Vattenfall Power Consultant AB
in association with Ramboll Natura AB and Earth Systems Lao










TABLE OF CONTENTS

EXECUTIVE SUMMARY..................................................................................................... V
B
ACKGROUND
..............................................................................................................
V

D
EVELOPMENT
S
CENARIOS AND
I
MPACT
Z

ONES
U
SED IN THE
A
SSESSMENT
...............
V

E
XPECTED
S
ECTORAL
D
EVELOPMENTS IN THE
N
AM
N
GUM
R
IVER
B
ASIN TO

THE YEAR
2020............................................................................................................
VI

S
UMMARY OF IDENTIFIED IMPACTS FOR THE DEVELOPMENT SCENARIOS
.....................

IX

S
UMMARY OF
S
TRATEGIC
C
ONCLUSIONS AND
R
ECOMMENDATIONS
.........................
XVI

1 INTRODUCTION........................................................................................................... 1
1.1 O
BJECTIVE OF THE
T
ECHNICAL
A
SSISTANCE
P
ROJECT
................................................. 1
1.2 C
UMULATIVE
I
MPACT
A
SSESSMENT AND
C

ATCHMENT
-W
IDE
S
TRATEGIC
E
NVIRONMENTAL
S
TUDIES
– T
HEORY AND
S
ELECTED
A
PPROACH
............................... 1
1.3 S
TRATEGIC
E
NVIRONMENTAL
A
SSESSMENT OF
L
AO
H
YDROPOWER
D
EVELOPMENT
... 2
1.4 H

YDROPOWER
D
EVELOPMENT IN
L
AO
PDR................................................................. 3
1.5 L
EGAL
F
RAMEWORK AND
G
UIDELINES
R
ELEVANT FOR
E
NVIRONMENTAL
A
SSESSMENTS OF
H
YDROPOWER IN
L
AO
PDR ............................................................. 5
1.6 N
OTE ON
A
DMINISTRATIVE
D
IVISIONS IN THE
N

AM
N
GUM
R
IVER
B
ASIN AND
S
PELLING OF
L
AO
W
ORDS
............................................................................................ 8
2 ENVIRONMENTAL AND SOCIO-ECONOMIC BASELINE ................................. 9
2.1 C
LIMATE AND
W
ATER RESOURCES
............................................................................... 9
2.2 L
AND USE AND AGRICULTURE
.................................................................................... 11
2.3 E
COLOGY
................................................................................................................... 12
2.4 M
INING
...................................................................................................................... 14
2.5 P

EOPLE AND
L
IVELIHOODS
......................................................................................... 14
3 HYDROPOWER IN THE NAM NGUM BASIN....................................................... 16
3.1 E
XISTING AND
F
UTURE
H
YDROPOWER
P
ROJECTS IN THE
N
AM
N
GUM
B
ASIN
............. 16
3.2 N
AM
N
GUM
3 H
YDROPOWER
P
ROJECT
...................................................................... 18
3.3 S

IMPLIFIED
E
FFICIENCY
I
NDICATORS FOR THE
P
ROJECTS IN OUR
D
EVELOPMENT
S
CENARIOS
................................................................................................................. 18
4 DEVELOPM
ENT SCENARIOS AND IMPACT ZONES........................................21
4.1 B
ACKGROUND
............................................................................................................ 21
4.2 T
HE
S
CENARIOS
......................................................................................................... 21
4.3 I
MPACT
Z
ONES
........................................................................................................... 22
5 FINDINGS ..................................................................................................................... 25
5.1 E
STIMATION OF

H
YDROLOGICAL
I
MPACTS OF
F
UTURE
D
EVELOPMENTS
.................... 25
5.2 E
NERGY PRODUCTION IN THE
N
AM
N
GUM
R
IVER
B
ASIN
............................................ 32
5.3 R
EVIEW OF THE
R
IVER
B
ASIN
H
YDROLOGICAL
M
ODEL

MORDOR
AND THE
H
YDROPOWER
S
IMULATION
M
ODEL
PARSIFAL....................................................... 38
5.4 C
LIMATE
C
HANGE
...................................................................................................... 39
5.5 L
AO
-T
HAI
W
ATER
T
RANSFER
.................................................................................... 42
5.6 R
EVIEW OF
P
OLICIES AND
L
EGAL
F

RAMEWORK
D
OCUMENTS
S
PECIFICALLY FOR
S
OCIAL AND
E
NVIRONMENTAL
A
SSESSMENT OF
H
YDROPOWER IN
L
AO
PDR............ 42
5.7 F
OLLOW
-
UP OF
R
ECOMMENDATIONS FROM
S
TRATEGIC
A
SSESSMENT OF
2004.......... 45
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

i

5.8 S
ECTORAL TRENDS
..................................................................................................... 46
5.9 I
MPACT
S
TATEMENTS FOR THE DIFFERENT DEVELOPMENT SCENARIOS
...................... 57
6 GENERAL CONCLUSIONS AND RECOMMENDATIONS OF A
STRATEGIC NATURE ...............................................................................................66
6.1 P
RIORITISED
R
ECOMMENDATIONS FOR
U
RGENT
I
MPLEMENTATION
.......................... 66
6.2 E
NGINEERING
H
YDROLOGY AND
H
YDROPOWER
P
RODUCTION
................................. 67

6.3 W
ATER
R
ESOURCES
.................................................................................................. 69
6.4 W
ATER
Q
UALITY
...................................................................................................... 70
6.5 L
AND
M
ANAGEMENT AND
L
AND
U
SE
....................................................................... 72
6.6 I
RRIGATION
D
EVELOPMENT
...................................................................................... 73
6.7 P
OLICY AND
P
LANNING
............................................................................................. 74
6.8 A

QUATIC
E
COLOGY
................................................................................................... 80
6.9 T
ERRESTRIAL
E
COLOGY
............................................................................................ 82
6.10 M
INING
..................................................................................................................... 84
6.11 S
OCIO
-E
CONOMY AND
P
OVERTY
I
SSUES
................................................................... 85
7 BIBLIOGRAPHY ......................................................................................................... 89

8 ABBREVIATIONS ....................................................................................................... 97
9 PEOPLE CONSULTED............................................................................................. 100
10 THE CONSULTING TEAM...................................................................................... 103

APPENDICES:
APPENDIX A: BASELINE FOR THE BIO-PHYSICAL ENVIRONMENT

APPENDIX B: PEOPLE AND LIVELIHOODS IN THE NAM NGUM RIVER BASIN

APPENDIX C: MONITORING PROGRAMMES

APPENDIX D: HYDROPOWER GENERATION STUDIES

APPENDIX E: DETAILED IMPACT STATEMENT


ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

ii

Acknowledgements
This report has been prepared by Vattenfall Power Consultant AB, in association with
Ramboll Natura AB and Earth Systems Lao. It has been prepared as a Technical Assistance
project with funding from the Asian Development Bank.
It is impossible to mention all the people that have assisted us in the preparation of this report.
The list of people consulted, at the end of this report, provides an attempt at thanking those
who have provided assistance, but we know the list is likely incomplete. We, therefore, wish
to extend our gratitude to each and everyone who have contributed to this report. However,
the responsibility for the conclusions drawn rests entirely with ourselves.
Some people and organisations have been particularly helpful and deserve special mention
here. These are, in no particular order: The staff at the Executing Agency for the study – the
Department of Electricity, notably its Social and Environmental Management Division under
the leadership of Mr Chantho Milattanapheng; The staff of the Nam Ngum River Basin
Development Sector Project under the leadership of Dr Alf Birch; The Information Center;
IWMU, MAF through Dr Thatheva Saphangthong; ADB staff in Vientiane, Hanoi and
Manila; Jeremy Bird, consultant, ADB; The Department of Energy Promotion and

Development; the FIPD MAF through Mr Khamma; as well as other staff at MAF; WREA;
MRC; WWF; and the WCS.
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

iii




ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

iv


Executive Summary
This study is based on analyses of secondary information only, due to circumstances beyond
the control of the consultants.
Background
The overall purpose of this consultancy assignment is to assist ADB in its preparations for
financing of the proposed Nam Ngum 3 Hydropower Project (NN3), located in the Nam
Ngum River Basin (NNRB) in Vientiane Province, in central Lao PDR. The key outcome is,
therefore, a strategic assessment of the entire Nam Ngum basin and the expected cumulative
impacts of the extensive hydropower development programme identified for the basin.
The Technical Assistance project (TA) consists of two components. This report deals with
component A. The implementation of component B is totally separated from the activity
described herein, and will not be further commented upon. Component A deals with two main
tasks, that of: a) a “cumulative impact assessment” for the NN3 project in accordance with the
ToR (ADB, 2007c); and b) the design and implementation of a medium-term environmental

monitoring programme for the river catchment, focussed on water-quality and aquatic
ecology, to be run under project financing until the end of the year 2009.
The work is closely related to another ADB project, the Nam Ngum River Basin
Development Sector Project (NNRBDSP) and close co-operation between the two activities
has been an important mean to achieve the objectives.
The theoretical distinction between cumulative impact assessment, as defined by the ADB in
the ToR, and strategic environmental assessment (SEA), varies among different experts and
organisations. The consultant has, in this study, interpreted the overall emphasis of our ToR
such that we focus our work on a strategic-level basin-wide study of the social and
environmental impacts of hydropower development and related major developments. The
ToR are very clear on the concept of a basin-wide study, looking at the water resources of the
entire Nam Ngum catchment, based on scenarios. This is well supported by the approach of
the NNRBDSP.

Development Scenarios and Impact Zones Used in the Assessment
In co-operation with experts from the NNRBDSP, we have developed three main
development scenarios, with attention paid to future changes in hydropower and irrigation.
They are:
•
Scenario 1: Present situation plus Nam Ngum 2 hydropower plant plus 61 000 ha of
pumped irrigation, mainly in the Vientiane Plains (down-stream of all hydropower plants
included in this study);
•
Scenario 2: Scenario 1 plus Nam Ngum 3 hydropower plant and;
•
Scenario 3: Scenario 2 plus Nam Ngum 5, Nam Lik 1 and 2, Nam Bak 1 and 2 as well as
39 000 additional ha of gravity-fed irrigation.
These scenarios are assessed for two different time horizons; 2013 and 2020, yielding 6
separate scenarios, 1a for scenario 1 in 2013, 1b for scenario 1 in 2020, and so on. These
years have been chosen because 2013 is the year when most of the additional hydropower,

ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

v

including Nam Ngum 3, is planned to go on line, and 2020 is the end year of the Lao PDR
government’s long-term strategic planning horizon.
It is important to recognise that a scenario is usually not a definite plan, or expected outcome.
Thus it is not the most likely future development, but rather a range of conditions which are
suitable for analysis of the included parameters. Instead, our scenarios are those that best
respond to our need for scenario-based impact assessment at the basin level. The goal of the
assessment is indicative conclusions on strategic priorities, not an actual prediction of the
expected outcome.
To facilitate the impact assessment for the scenarios, four impact zones were identified. The
reason for not using the, in hydropower environmental assessments, standard approach of
upstream, downstream and immediate reservoir area as the main impact zones for assessment
is quite straightforward. With the number of planned hydropower plants in the basin, we
would have ended up with not only an unmanageable number of impact zones, but also
overlapping ones. Thus, the four adopted impact zones were selected based on the sub-basins
identified under the NNRBDSP, with a view to group them according to their natural
environments. They are shown in a map on the next page. The zones are described in detail in
the main report, see section 4.
Expected Sectoral Developments in the Nam Ngum River Basin to the
year 2020
Water resources
The main water users are hydropower and irrigation, with mining, domestic and industrial
uses using, relatively speaking, minor quantities. The predicted additional (extractive) uses in
the hydropower sector (as evaporation from reservoirs), is around 1.5 m
3
/s, and the irrigation

sector will use an estimate 6 m
3
/s. These figures are additional use (compared to present-day
situation) for the entire basin in scenario 3b (scenario 3 in 2020).
Water quality will be affected, severely in many parts, due to the growing number of deep
reservoirs with bottom-level intakes.
Hydropower
The hydropower sector is developing very fast in Lao PDR. The realistic situation in the Nam
Ngum catchment in 2020 is between approximately 1 500 and 1 800 MW of installed hydro-
electric generating capacity, excluding inter-basin-transfer projects. This should be compared
with the 255 MW in place at the time of writing, in 2007. This will generate somewhere
between 5 500 and 7 000 GWh of electrical energy per year.
Land use and irrigation
During the coming decade, as the area of swidden agriculture decreases, it is anticipated that
there will be a forest regeneration in fields that were previously cultivated under the
traditional rotational fallow system. Over time, these regenerating forest areas are expected to
revert to more dense forest. There will also be an expansion of paddy land and commercial
tree planting. There will be a moderate increase in grassland (grazing) areas.
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

vi

Map of the NNRB Impact Zones, with existing and future hydropower reservoirs and
plant locations.

Source: MAF
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

vii

Irrigation will develop slowly in most parts of the basin, but in the Vientiane plains a
somewhat higher rate of development is expected. There, wet-season rice areas will increase
when irrigation operational efficiency improves. Dry-season irrigation will focus on rice and
higher-value crops. Water availability will not be a limiting factor in irrigation.
Aquatic ecology
Increased fish production is considered by the Government of Lao PDR to be an important
strategy for contributing to food security. Given other expected developments in the Nam
Ngum catchment, it is likely that a necessary increase will have to come from aquaculture.
Water quality in the Nam Ngum 1 reservoir will be significantly affected and key migration
routes will be blocked by, primarily, the construction of the Nam Ngum 2 and the Nam Lik
hydropower plants. The new reservoirs are mainly expected to have moderate (Nam Ngum 2)
to low potential for reservoir fisheries.
Forestry and biodiversity conservation
In the coming years, logging will mainly be confined to designated Production Forests, but
unplanned timber harvesting outside these areas will still continue, but at a low rate. Large
areas will be designated as Watershed/Reservoir Protection Forests under ministry’s
programme, especially along the Nam Ngum river. Tree plantations will expand. The forest
cover is predicted to be around 45 % in the year 2020 – an increase of about 100 000 ha
compared with the present situation.
Firewood extraction and charcoal-making will likely remain at approximately the same level,
since an increased population is offset by reduced use of such fuels in the growing urban
areas.
There will be an increase in local people’s involvement in forest and protected-areas
management. The Forest Resource Development Fund and the Environment Protection Fund
will enhance conservation management. Villagers’ dependency on wildlife will decrease
somewhat as a result of the improvement of alternative production systems and protein being
secured from domesticated sources.
Mining

Over 6 000 km
2
of mine concession areas have been approved in the NNRB, as of 2006. Phu
Bia Mining Limited has almost half of that area, and will likely remain a dominant actor.
Mining activities are expected to intensify in the future. A majority of those mining projects
that presently are listed as in prospecting and/or exploration stages are expected to move into
operation. With more mines, the probability for accidents, potentially causing e.g. water-
quality impacts, increases. By 2020, new developments of medium- to large-scale mining
activities in the NNRB are expected to slow down as mining concession areas become
exhausted. However, because of their long life cycles, large mines will continue to affect the
environment well beyond 2020.
Given that the consequences of large mining accidents can be very serious, the risks
associated with large-scale mining operations in close proximity to settlements and water
courses have to be regarded as a key element of social and environmental risks in the basin.
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

viii

Socio-economy and poverty
Socio-economic development to the year 2020 is largely dependent on the extent to which the
Environmental Management Planning processes in the hydropower and mining sectors have
proven successful in mitigating and addressing key concerns, and on the successful
coordination between the different developers and owners of those businesses.
The future management of the resettlement process for NN2 is a key issue for overall socio-
economic and poverty status in a large part of the basin. If identified shortcomings have not
been adjusted and provisions made are insufficient, it is most likely that land provisions have
been insufficient, compensation schemes have largely failed to address the issues leading to
conflicts developing between resettled and host communities, as well as marginalisation of
vulnerable groups and a generally poor uptake of economic opportunities among all but the

wealthiest segments of society.
The developments are likely to speed the on-going process of integration and assimilation of
ethnic minorities into mainstream Lao culture.
Urbanisation will likely accelerate but, at the same time, transportation facilities (partly as a
direct impact from major development projects) in the rural areas will be significantly
improved and formerly remote areas will be connected to the national road system by all-
weather roads. A number of schools will have been built, and the general educational situation
will have improved.
Markets are accessible, and some families will benefit from growing newly introduced cash
crops, or from the sale of NTFP. New technologies and consumer products will have entered
the area, making life easier for those who can afford them.
Reservoir and natural surrounding, in particular that of the NN2 reservoir, will become of a
significant value for recreational purposes, attracting tourism and opening up the opportunity
for income-raising for locals, as well as outside investors. However, the damming of the Nam
Lik will severely limit the eco-tourism potential of that river. Provincial consultations have
revealed this as a key concern of provincial-, district- and village-level authorities in the area,
Health
The establishment of reservoirs for hydropower-electric power plants could cause higher
frequencies of waterborne diseases such as malaria, dengue fever, schistosomiasis etc.
Improved communication and influx of workers, with camp followers, may cause higher
frequencies of sexually transmitted infections, with HIV/AIDS, being the one of most
concern.
Possible negative impacts on fisheries, especially locally, e.g. the Nam Ngum 1 reservoir,
might affect the nutritional status of the local population. Especially children and pregnant
women are vulnerable, and malnutrition is a constant risk factor.
Summary of identified impacts for the development scenarios
Below we present summary tables of the impacts for the three scenarios with two time
horizons. The table should be read in a cumulative manner, i.e. the presented impacts in
scenario 1b (scenario 1 in the year 2020) are those that are different compared to 1a (scenario
1 in the year 2013. Likewise, described impacts in scenario 2a are those that are additional as

compared to scenario 1a, and so on.
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

ix

Summary of identified impacts for Scenario 1: Present situation + Nam Ngum 2
hydropower plant, and 61 000 additional ha of pumped irrigation
Scenario 1a, 2013 Scenario 1b, 2020
Upper Nam Ngum (1)
•
The human population is increasing, and
there is a high risk for unsustainable use
of land and forest resources.
Upper Nam Ngum (1)
•
No additional impact as compared to
Scenario 1a.
Mid Nam Ngum (2)
•
The NN2 project creates conflicts over
land use due to in- and out-migration.
•
The NN2 reservoir acts as a sediment
trap, reducing the suspended sediment
transport into the NN1 reservoir.
•
Water in the NN2 reservoir has lowered
dissolved-oxygen concentrations,
seriously affecting water quality in the

NN1 reservoir.
•
Evaporation from the NN2 reservoir
reduces inflows to the NN1 reservoir,
but with reduced spillage, the energy
production in the NN1 hydropower plant
is still increased by approximately 75
GWh/year.
•
The energy production in the new NN2
will be just over 1 800 GWh/year.
•
A total of around 8 700 ha of agricultural
land inundated (out of which 500 ha is
paddy land), but about 1 000 ha of
abandoned upland cultivation areas are
regenerating.
•
Loss of river habitats affects aquatic
species composition negatively, and
alters the abundance. Species that are
tolerant to a wide range of physiological
conditions will proliferate.
•
The NN2 dam is a migration barrier to
species living in the NN1 reservoir.
•
Fishery in the NN1 reservoir is
significantly affected due to poor water
quality of the NN2 releases and barriers

to migration.
•
The NN2 reservoir inundates little
forested areas, and no key habitats are
located in the reservoir. No NBCAs or
Protected areas are directly affected by
Mid Nam Ngum (2)
•
Water quality has improved, and erosion
and reservoir sedimentation is reduced as
compared to 2013.
•
Stratification in the NN2 reservoir
results in low dissolved oxygen and
slightly acidic water affecting the down-
stream areas.
•
Regenerating forests reach an area of
over 10 000 ha.
•
The Nam Ngum river upstream of the
NN2 reservoir is likely to contain less
migrant river species, with possible local
extinctions owing to habitat
fragmentation and degradation.
•
Communities granted access to the NN2
reservoir will obtain moderate benefits
from the fisheries.
•

Significant reduction in productivity and
biodiversity in the NN1 reservoir. Keng
Noi conservation area is no longer
expected to be a viable breeding site.
•
Road transportation in some previously
remote areas has improved, causing
increased hunting and illegal logging,
but improved monitoring/control offsets
the negative impacts to a certain extent.
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

x

the reservoir.
•
Transmission lines and roads reduce
forest area, improve access to previously
remote areas, and fragment the
landscape.
•
The NN2 transmission line will pass
through the Phou Khao Khouay (PPK)
NBCA, which will suffer from habitat
fragmentation.
•
Approximately 6 000 people will be
resettled to Fuang District in Vientiane
Province.

Nam Lik –Nam Xong (3)
•
The management plans for addressing
the situation of the approximately 6 000
resettlers from NN2 do not address all
their needs in a satisfactory manner and,
if not rectified soon, will lead to
widespread poverty, conflicts and
economic marginalisation. Provided that
these failures are addressed, and the
management plans are implemented in
good order in the near future, the
resettlers are generally expected to adjust
well to new conditions.
•
However, even with an assumed
successful implementation of proper
mitigation, not all NN2 resettlers are
able to make a living from agricultural
production and will become dependent
on wage labour.
•
Grievances procedures are not
functioning in a satisfactory manner,
leading to increased conflicts.
•
Resettled villagers from the NN2 area
develop irrigation schemes, which
increases pressure on local water
resources.

•
NN2 resettlers encroach into upland
areas of neighbouring villages, leading to
conflicts with the host population.
•
Resettlers from NN2 convert secondary
forests to upland agriculture, and
increase the pressure on biodiversity
(NTFP, hunting).
•
High impact on stress-related diseases
Nam Lik –Nam Xong (3)
•
The water demand for irrigation and
domestic uses increases by 2020.
•
Insufficient upland and paddy land cause
continued land conflicts in the NN2
resettlement area, between host villagers
and the resettlers.
•
Resettlers’ dependency on forests and
biodiversity is decreased, because
alternative livelihoods develop (i.a.
intensified agriculture, agroforestry).
ADB TA 4921-LAO: Preparing the Cumulative Impact Assessment for the Nam
Ngum 3 Hydropower Project. Components A, parts 1 and 2, Final CIA Report

xi

and problems on the resettled population.
•
Moderate impact on malnutrition, acute
respiratory infections (ARI) and
HIV/AIDS among the resettlers, and
among people who possibly stay in the
area of the NN2 reservoir.
Lower Nam Ngum (4)
•
Abundant water availability for irrigation
leads to moderate increase in paddy-rice
productivity, and diversification into
higher-value crops.
Lower Nam Ngum (4)

The NNRB Basin
•
The energy production in the basin is
approximately 2 900 GWh/year.
The NNRB Basin
•
No significant change in energy
production compared with Scenario 1a.

Summary of identified impacts for Scenario 2: Present situation + Nam Ngum 2
and Nam Ngum 3 hydropower plants, and 61 000 additional ha of pumped
irrigation
Scenario 2a, 2013 Scenario 2b, 2020
Upper Nam Ngum (1)
•

NN3 reservoir inundates some paddy
and grazing land.
•
Habitat fragmentation due to further
blockage of migration routes upstream
and along main tributaries as a
consequence of the impoundment of
NN3.
Upper Nam Ngum (1)
•
Weakening of the aquatic fauna gene
pool and extinction of certain species.
Mid Nam Ngum (2)
•
Stratification in the reservoir results in
the release of water which is relatively
low in dissolved oxygen. The water
quality in the NN1 and NN2 reservoirs is
negatively affected by upstream-lying
reservoirs.
•
NN3 acts as a sediment trap, and reduces
the suspended-sediment transport into
the NN2 reservoir.
•
Evaporation from the NN3 reservoir
reduces the inflow to the NN2 reservoir
but the annual average energy
production at NN2 still increases by
approximately 35 GWh/year (due to less

spillage).
Mid Nam Ngum (2)
•
The living conditions for the villagers
resettled as a result of NN3 are
improved.
•
The water quality in the reservoirs
improves. However, due to the depth of
the NN3 reservoir, thermal stratification
exists, resulting in lowered dissolved
oxygen and cool temperatures in the
tailrace water.
•
The fisheries in the NN2 reservoir have
stabilised somewhat, and are moderately
productive.
•
Water quality and fisheries are also
improving in the NN1 reservoir.
•
Watershed management interventions
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•
The combined evaporation from the
NN3 and NN2 reservoirs reduces the

inflow to NN1 further, but the annual
average energy production in the NN1
hydropower plant increases by
approximately 80 GWh/year (due to less
spillage).
•
The average water levels in the
reservoirs are higher and the water
spillage is reduced.
•
Just over 1 000 ha of additional
(compared to Scenario 1a) agricultural
land is inundated.
•
Poor-quality water from the NN3
reservoir inhibits the establishment of
reservoir fisheries in the NN2 and blocks
the migration route upstream from the
NN2 reservoir, affecting spawning etc.
•
The river reach down-stream of the NN3
dam as far as the power house, is
seriously affected due to extremely low,
or even no flows.
•
The inundation of the two reservoirs
reduces the forest area. However, neither
reservoir is in or near any NBCAs,
Protected areas or key habitats.
•

The NN2 and NN3 power plants have
separate transmission lines. Hence the
PPK NBCA will suffer additional
fragmentation.
•
An additional 500 people are resettled as
a result of NN3. It is, however, expected
that socio-economic safeguards for this
project will live up to international
standards.
•
There is a moderate impact on
HIV/AIDS, other Sexually Transmitted
Infections (STIs), malnutrition, ARI,
drowning and stress-related diseases in
the NN3 area.
result in minor positive impacts and
reduction of timber harvesting, resulting
in improved status of the forests.
Nam Lik –Nam Xong (3)
•
No additional impacts compared with
Scenario 1a.
Nam Lik –Nam Xong (3)
•
No additional impacts compared with
Scenario 1b.
Lower Nam Ngum (4)
•
The release of deep-level water from the

Lower Nam Ngum (4)
•
No additional impacts compared with
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NN3/NN2/NN1 reservoirs affects the
water quality in the lower reaches of the
Nam Ngum river negatively.
Scenario 1b.
The NNRB Basin
•
The energy production in the basin is
approximately 4 700 GWh/year.
The NNRB Basin
•
No significant change in energy
production compared with Scenario 2a.

Summary of identified impacts for Scenario 3: Present situation + Nam
Ngum 2+3+5, Nam Lik 1+2 and Nam Bak 1+2 hydropower plants, and 61 000
additional ha of pumped irrigation as well as 39 000 ha of gravity-fed irrigation.
Scenario 3a, 2013 Scenario 3b, 2020
Upper Nam Ngum (1)
-
Upper Nam Ngum (1)
-
Mid Nam Ngum (2)

•
Evaporation increases from the new
reservoirs.
•
Approximately 2 000 ha of additional
(compared to Scenario 2a) agricultural
land is inundated.
•
The regulation of the Nam Bak river
have significant impacts on its water
quality, affecting aquatic fauna and
fisheries. This causes a cumulative
negative impact on the NN1 reservoir as
well.
•
Nam Ngum 5 resettles approximately
400 people.
Mid Nam Ngum (2)
•
Water quality is improved for all
reservoirs in the Middle Nam Ngum
Impact Zone. However, the release of
hypolimnion water with a lower
dissolved oxygen content still influences
water quality of downstream water
bodies negatively.
•
Severe and long-term impacts on river
habitat and fish productivity. The Nam
Bak river is no longer a key spawning

area.
•
NN5 and Nam Bak 1 and 2 reservoirs
have poor to moderately productive
fisheries.
•
In NN1 reservoir, there is stocking of
exotic fish species, and cage culture
operated by larger companies.
Nam Lik –Nam Xong (3)
•
Key migration routes blocked. Long- and
medium-distance migrant species unable
to migrate up and down the Nam Lik.
The only presently intact unregulated
channel from the Nam Ngum basin to
the Mekong is no longer accessible. This
causes significant permanent impacts on
migratory species, productivity and
diversity.
•
A significant resettlement impact is
caused by the Nam Lik 1 project –
potentially over 2 000 people.
•
The damming of the Nam Lik, primarily
Nam Lik –Nam Xong (3)
•
Water quality in the NL1 and NL2
reservoirs is improved.

•
Considerable impact on livelihoods due
to loss of fish productivity and increased
fishing pressure.
•
The water quality has stabilised in the
NL 1 and 2 reservoirs.
•
The NL 1 and 2 reservoirs have
minimally productive fisheries.

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that of Nam Lik 1, severely limits the
eco-tourism potential of that river.
•
Resettled villagers increase pressure on
water resources, e.g. diversion of water
for irrigation and domestic use.
•
The poor water quality released from the
NL2 reservoir causes water quality
problems in the NL1 reservoir.
•
Nam Lik 1 and 2 inundate over 7 000 ha
of land, out of which close to 3 000 ha is
forest and over 2 000 ha is upland

agricultural land.
•
The Nam Lik 2 project improves access
to a previously densely forested area,
with potential negative impacts on
logging.
Lower Nam Ngum (4)
•
Sediment transport below the confluence
of the Nam Ngum and Nam Lik rivers is
significantly reduced.
•
The NL1 and NL2 projects have
negative impacts on the water quality in
the lower Nam Ngum river.
•
The wet-season flows in the Vientiane
plains are reduced and the dry-season
flows are increased.
Lower Nam Ngum (4)
•
Water quality is improved as compared
to the situation in scenario 3a. There is,
however, a residual negative impact on
water quality since Nam Lik water does
not dilute the releases from the NN1
reservoir.
•
Impacts from increased nutrient run off
from increased irrigated agriculture is

likely to affect the aquatic fauna
negatively.
The NNRB Basin
•
The energy production in the basin
(excluding the Nam Bak projects)
exceeds 5 600 GWh/year.
•
The six hydropower reservoirs
completed by 2013 cover a total of
23 000 ha – representing 1.3% of the
total NNRB area. A third of the
combined reservoir area consists of
forests. The forests inundated by the
reservoirs represent 1% of the total forest
area in the whole NNRB.
•
The reservoirs do not affect any NBCAs,
Protected areas or known key habitats.
•
The reservoirs completed by 2013
entirely change the nature of the aquatic
habitats and fisheries. Previously
riverine habitats are transformed into a
series of low to moderately productive
The NNRB Basin
•
No significant change in energy
production compared with Scenario 3a.
•

Slight positive forestry developments are
achieved, mainly due to better protection
of the riparian forest; control of timber
harvesting; and watershed management
interventions which result in improved
natural regeneration.
•
The water quality will have improved in
all reservoirs.
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reservoirs.
•
The projects will have resettled close to
10 000 people.
•
The hydropower development requires
improved or new infrastructure,
estimated to be 150 km of roads and 350
km of transmission lines.
Summary of Strategic Conclusions and Recommendations
The general principle for recommended actions and mitigations is the user/polluter pays, i.e.
that e.g. hydropower and mine operators pay for, and carry the responsibility for, all actions
necessary to mitigate impacts caused by their operations.
Prioritised Recommendations for Urgent Implementation
The following are our key prioritised overall recommendations coming out of the study.
These need regular follow-up by WREA and the ADB:

1.
Following the urgent establishment of the Nam Ngum River Basin Committee, a sub-
committee in the form of a co-operative management entity for the various power-station
owners/operators should be formed, to ensure optimised management. If possible, this
sub-committee should also include the major mine operators in the basin;
2.
Environmental flow management needs careful consideration as a national priority. There
are lessons to be learned from outside the country and from existing projects with
environmental flow releases in place (e.g. NT2, Theun Hinboun). WREA and DoE to
jointly be responsible for a national study to produce binding guidelines for future dam
projects. This activity could possibly be funded under the water-resources window (if and
when established) of the EPF;
3.
A comprehensive basin-wide monitoring programme for water quality should be
developed and be managed, in the long term, by WREA. The objectives would primarily
be to monitor and evaluate the medium- to long-term impact of the very extensive
developments planned for the basin in order to assist future management and mitigation
programmes. On-going work within the WRCCS on a water-quality monitoring network
is a good starting point supported by the monitoring that will be carried out during 2008-
2009 as a part of this study;
4.
The standards for benefit-sharing between hydropower project sponsors and affected
peoples could be improved. Practically, this could be done through the Environment
Protection Fund. A clear focus on regional and local beneficiaries is recommended and
lessons learned from the ADB-supported project on Benefit Sharing Mechanisms for
People Adversely Affected by Power Generation Projects in Viet Nam could serve as an
excellent starting point;
5.
A national prioritisation study for aquatic conservation. This could ideally be done in co-
operation between WREA, the MRC and one or several of the major conservation NGOs

(e.g. WWF, IUCN, WCS) active in Lao PDR. The goal would be to identify a few key
river systems that need total protection from large-scale developments such as
hydropower, irrigation dams, large mining projects etc.;
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6.
GoL is recommended to establish independent and empowered monitoring systems
(including an impartial grievance mechanism) for all hydropower projects. These
monitoring systems/programmes will provide much needed quality control of the
implementation of socio-economic as well as environmental safeguards. The follow-up of
this monitoring should be carried out by the appropriate unit within WREA.
Engineering Hydrology and Hydropower Production
When all the hydropower plants included in our development scenarios are in operation in
2020, the new reservoirs will cause an increase in dry-season flows in the Vientiane plains by
approximately 10%, while the wet-season flows will be marginally reduced.
Irrigation-withdrawals of water will reduce the total energy production by approximately 30
GWh/year (analysed for scenario 3b).
The filling-up of the dead-storage volumes in the new reservoirs will cause a total loss of
energy production of just over 400 GWh in Nam Ngum 1, and close to 150 GWh at Nam
Ngum 2. However, when all the plants/reservoirs are in operation, the energy production will
increase by almost 100 (NN1) and just over 50 GWh/year (NN2), respectively.
Total generation in the b-scenarios (situation in 2020) of each development scenario
(excluding Nam Bak) will be around 2 900, 4 700 and 5 700 GWh/year, for respectively
scenario 1, 2 and 3.
Greenhouse Gas Emissions Resulting from Reservoir Impoundment
The climate-change impacts from the impoundments is expected to be small compared to
alternative means of producing the same electric energy. There are no accepted standard

approaches to calculating GHG emission from hydropower project (intensive research is on-
going in this field). In order to demonstrate the order of magnitude of emissions, we have
made a number of assumptions. If all vegetation will be cleared from the future reservoirs, but
otherwise assuming the worst possible (and extremely unrealistic) conditions, i.e. all carbon
released as methane, the specific emissions based on 40 years of operation would range from
50 g of CO
2
-equivalents per kWh (NB2) via 100 (NN3), 400 (NN2) to the extreme case of
almost 1 600 (NL2). The latter case, if realistic, would make it highly unsuitable for
development. If we instead assume that all carbon is released as CO
2
(which realistically is
closer to the truth), the results would be 2, 5, 18 and 74 instead. As a reference, standard life-
cycle-based GHG emissions for e.g. a combine-cycle natural-gas-fired power plant is just
over 400 g of CO
2
-equivalents per kWh and a modern coal-fired plant around 700 (Vattenfall,
2005). The specific emissions for hydropower varies very much depending on the natural
conditions, so a generally applicable figure is impossible to give.
Water Resources and Water Quality
A range of management and mitigation measures should be implemented to minimise
negative impacts on water resources from the developments described by the scenarios.
The Nam Ngum River Basin Committee (NNRBC) which is being established needs to be
formalised urgently.
It is very important that a co-operative management entity, primarily made up of the various
power-station owners/operators under the auspices of the NNRBC, is formed. All relevant
stakeholder need to be part of this entity, including the DoE. This “hydropower-producers’
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organisation” would also ideally make room for major mining operators, since important
water-resources co-ordination issues between the two industries exist.
Environmental flow management needs careful consideration as a national priority. There are
lessons to be learned from outside the country and from existing projects with environmental
flow releases in place (e.g. NT2, Theun Hinboun). WREA and DoE to jointly be responsible
for a national study to produce binding guidelines for future dam projects. This activity could
possibly be funded under the water-resources window (if and when established) of the EPF;
Key impacts on water quality will likely include: localised increase in total suspended solids
(TSS) and turbidity near the reservoir banks; thermal stratification, resulting in limited mixing
of surface (epilimnion) and deep (hypolimnion) reservoir waters; low dissolved oxygen (DO)
content and; generation of hydrogen sulphide (H2S). Localised increases in soil erosion is
likely, sediment-control structures and re-vegetation of cleared area should be implemented.
It will be important for the owners/operators of the planned hydropower installation to
address the expected impacts caused by intakes located only at deep levels of the reservoir. At
least one, but preferably a combination of: aeration structures; airlift pumps and; variable-
level water intake structures should be constructed.
A comprehensive basin-wide monitoring programme for water quality should be developed
and be managed, in the long term, by WREA. The objectives would primarily be to monitor
and evaluate the medium- to long-term impact of the very extensive developments planned
for the basin in order to assist future management and mitigation programmes. On-going work
within the WRCCS on a water-quality monitoring network is a good starting point supported
by the monitoring that will be carried out during 2008-2009 as a part of this study.
Land Management and Land Use
The continuation of the delineation of village management areas and land use zones is a very
appropriate approach. An issue for the future is the registration of communal village lands to
ensure that villagers retain tenure rights.
It is recommended to develop a procedure for the integration of the IWMU village land-use
zoning and mapping activity and the district-level land-use planning activity.

The agricultural models promoted by the NNRBSDP are generally considered appropriate.
The expansion of potential paddy land areas provides a sustainable food security benefit to
villagers, and offers the possibility of diversification to higher value crops in areas where dry-
season water is available. Similarly the improvement in fodder systems for large livestock is
now a well-established practice in parts of upper basin and has potential for expansion in
other areas. It is likely to be fairly readily adopted by ethnic Hmong villagers given their
traditional experience with livestock systems. Commercial tree planting is appropriate in areas
with access to transportation and marketing. Caution will need to be exercised with rubber
planting, to ensure that small-holders are not deprived of traditional land and that they enter
into equitable contract arrangements if they are involved with development companies.
Rubber should primarily be considered an agroforestry crop, not a mono-culture plantation
crop.
The consultants consider the strengthening of village-based development funds, such as
savings groups and revolving funds an appropriate way to increase opportunities for villagers
to adopt improved technologies. The advantage of these systems is that the poorer segments
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of the population have opportunities to evaluate and expand activities gradually with lower
levels of risk.
Irrigation
It is expected that, due to expanded irrigation, there will be moderate dry-season rice-area
increases of 10% for the three time horizons under scenarios 1, 2, and 3. There will be a
similar trend for higher-value dry season crops under scenarios 1 and 2, i.e., 10% area
increase, but an acceleration to 20% for the time horizons under scenario 3, when the
projected wet-season area increases with the addition of gravity-fed irrigation.
Water availability will not be a problem, but a potential lack of funds for maintenance, repairs
and operation of pumping projects, siltation and control of irrigation canals, and difficulties

with irrigation service fee collection pose risks to development.
The rehabilitation of existing large-scale pumping and gravity-fed irrigation systems in the
Vientiane plains should be a priority.
The construction and/or improvement to existing small-scale irrigation systems should receive
close consideration, in order to ensure that potential benefits accrue to villagers in upstream
Nam Ngum and Nam Lik-Nam Xong locations.
The development of paddy land and the provision of adequate irrigation to the Nam Ngum 2
resettlement area in Fuang District should be a matter of priority.
Policy and Planning
Strategic Environmental Assessment (SEA), is not mentioned in the key legal-framework
documents in Lao PDR and we recommend that SEA is formally put into the legislation and
regulations for environmental assessment in general, and for hydropower in particular.
The SEA for Lao PDR hydropower carried out in 2004 (Norplan, 2004), needs to be followed
up. This would ideally be done on the initiative of DoE with support from the backers of the
2004 study, i.e. the World Bank.
The standards for benefit-sharing between hydropower project sponsors and affected peoples
could be improved. Practically, this could be done through the Environment Protection Fund.
A clear focus on regional and local beneficiaries is recommended and lessons learned from
the ADB-supported project on Benefit Sharing Mechanisms for People Adversely Affected by
Power Generation Projects in Viet Nam could serve as an excellent starting point.
The government is working very constructively to improve the water resources planning and
management system in Lao PDR. The establishment of the Water Resources and
Environmental Agency (WREA) is a highly appropriate organisational step. A national water
resources strategy will be developed by WREA, along with legal reform and policy
development. It is important to consider how the various assessments and plans such as EIA,
CIA, SEA, and river basin plans will be linked to the national planning process in planning
time frames of 5 years and 10 years.
The land-use planning and development approach of MAF is good, however overall planning
in the NNRB has not been adequately addressed, and therefore a link is needed between the
land-use planning, land use and rural-development activities and the water-management

activity, in order to achieve better coordination and impact.
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Aquatic Ecology
The proposed hydropower schemes on the Nam Lik will permanently cut off a large part of
the lower Nam Ngum and Nam Lik-Nam Xong basins, for local and Mekong mainstream
aquatic fauna migrants. The damming of the Nam Lik will be expected to have considerable
local impacts on habitats, species diversity and genetic mixing. The existing migration route
to and from the Mekong River is the only remaining, effectively unregulated connecting
channel in the Nam Ngum Basin, and used by important migrant species such as Pangasids
and Cyprinids (see Appendix A). The Nam Lik river supports a population of over 30 000
people, many of whom have a strong dependence on fisheries.
After impoundment of the Nam Ngum 2 reservoir which will close the up-stream migration
routes for fish resident in the Nam Ngum 1 reservoir, the connection between the Keng Noi
conservation zone in the reservoir, just down stream of the Nam Ngum 2 tailrace, and the
Nam Bak river becomes even more critically important. The impacts will be felt primarily by
the around 1 800 households presently benefiting from reservoir fisheries, but also by people
residing up-stream on the Nam Ngum and Nam Bak.
From a biodiversity perspective, the river habitat will be irreversibly changed to a series of
lacustrine (lake) environments and degraded connecting channels with very low flows likely
to be unable to support existing ecosystem services. Riverine species will of course be
affected, with species unable to withstand resultant changes being lost from these former river
reaches and local migratory species experiencing considerable negative impact as well.
Benefits to communities from traditionally-managed wild-capture fisheries and use of other
aquatic products are often considerably more equitable than those of reservoir fisheries.
Subsistence farmers, the poor, the landless, ethnically and otherwise marginalised groups reap
significant benefits from aquatic resources. With few alternatives, and alongside increasing

pressures on these resources, the most vulnerable people are likely to be hit hardest by any
impact on habitats and wild captures fisheries. However, given other expected developments
in the Nam Ngum catchment, it is likely that a necessary increase in fish production will have
to come from aquaculture. Thus, other elements of government strategy may prove to be even
more important when considering the broader context of sustainable wild-capture fisheries
and sustaining and improving fisheries-based livelihoods. Pertinent elements focus upon
fisheries legislation and decentralised governance, and whether they will incorporate
appropriate management of habitats important to fish life cycles and be targeted more closely
to the active involvement of local people in managing wild capture fisheries.
Given the social impacts, the environmental costs and the rather limited electricity-generating
capacity (a combined total of only 160 MW), there would have been a clear strategic benefit
to leaving the Nam Lik in its current, effectively unregulated, condition. In light of the
extensive plans for hydropower in the Nam Ngum Basin, the Nam Lik could have been used
as part of an offset strategy for intact river systems suggested in the GoL’s Hydropower
Development Strategy Study, and the approach now taken as a national priority in many other
countries. The protection of the Nam Lik river was seen by the consultant as a key priority.
However, at the very end of our study period, the Nam Lik 2 project was cleared for
construction, effectively making our prioritised approach impossible to implement. Therefore,
we suggest a national prioritisation study for aquatic conservation. This could ideally be done
in co-operation between WREA, the MRC and one or several of the major conservation
NGOs (e.g. WWF, IUCN, WCS) active in Lao PDR. The goal would be to identify a few key
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river systems that need total protection from large-scale developments such as hydropower,
irrigation dams, large mining projects etc.
Optimisation of water levels in reservoirs should be agreed on with both down-stream and
upstream developers.

We recommend the development of a fair and equitable distribution of benefits through
appropriate fisheries co-management systems to manage both reservoir and river fisheries.
Co-management provides an opportunity for communities to collaboratively manage fisheries
for sustainable benefits. A partnership must be established between local communities, local
government, concession holders and other key stakeholders such as the department of
livestock and fisheries. Administrative mandates are developing at this time, but the financial
support should realistically come from the concession holders contributions to the
Environment Protection Fund and community development initiatives.
Compensation for loss of fish to communities needs to be worked out in consultation with the
communities themselves. One option sometimes considered is fish for fish whereas others
tend to focus on support to alternative livelihood options through start up funds and capacity
building/advisory support, alongside appropriate micro-credit facilities. It will be important to
learn from the successes of other such compensation schemes in the region, and ensure that
any compensation measures are carefully considered and supported over the long term.
Terrestrial Ecology
The forests in the seven reservoirs are not of a key conservation concern, and no particularly
valuable habitats for terrestrial fauna are known to exist. There are no conflicts with NBCAs
or Protected areas. The total area of the reservoir-inundated land is 23 000 ha out of which
7 000 ha are forests. This represents only approximately 1% of the NNRB forests.
Power transmission lines will affect the Phou Khao Khouay NBCA over a total distance of
approximately 30 km. The impact is predicted to be low to moderate compared to existing
disturbances in the park, but does contribute to the fragmentation of PKK.
It is recommended to raise the required standard of the terrestrial ecological surveys carried
out in connection with major projects and to make sure that key government staff (MAF,
NUoL, WREA) are consulted and invited to learn from the work – as a capacity-building
effort.
Developers of transmission lines and roads, with the aid and control of the appropriate
governmental entities, should coordinate their projects with the purpose of minimising
negative impacts on forests and biodiversity and maximising positive impacts.
Developers of hydropower projects should contribute to the financing of conservation and

watershed protection efforts in the river basin. One appropriate vehicle for such contribution
is the Environment Protection Fund.
Mining
The development of hydropower projects will no doubt affect the current and future mining
activities in the NNRB. Cumulative impacts from both mining and hydropower development
on socio-economy and the environment can be significant if project owners do not co-operate.
To ensure sound development, mining and hydropower projects must work co-operatively to
address potential impacts. Management and monitoring must be a central part of development
for both the mining and the hydropower projects.
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