The Theun-Hinboun Power Company commenced operation of its Expansion Project in Central Laos today, jeopardizing the livelihoods of tens of thousands of people. The project, consisting of a new dam on the Nam Ngouang River and a doubling of capacity at the existing Theun-Hinboun powerhouse, will double the amount of water being diverted into the Hai and Hinboun Rivers, causing extensive flooding and other impacts. The project been marked by controversy for years due to the company's failure to compensate villagers for the impacts of the first project and poor plans for compensating communities whose lives will be affected by the expansion. International Rivers has been monitoring the Theun-Hinboun Dam since it first commenced operations in 1998.

 "The Theun-Hinboun Expansion Project has displaced over 7500 people and will affect the livelihoods of tens of thousands more people living downstream," said Tania Lee, Lao Program Coordinator for International Rivers. "The plans to restore livelihoods are woefully inadequate. The Theun-Hinboun Power Company - which is part-owned by the Norwegian state-owned company Statkraft - is profiting at the expense of some of Southeast Asia's poorest people."

Since the original Theun-Hinboun Project started operations in 1998, thousands of people living downstream along the Hai and Hinboun Rivers have experienced flooding of rice fields, decreases in fish catch and inability to grow vegetables along the riverbanks. Despite these heavy losses, project owners have never adequately compensated communities. The Theun-Hinboun Expansion Project will exacerbate the effects of the first dam and force many people living downstream along the Hai and Hinboun Rivers to move to new relocation sites away from the river. For many villagers, this will make living off the land increasingly impossible.

Already several villages have been relocated to new sites downstream and interviews with these villagers reveal that people are worried about how they will grow rice and feed their families in the future. Land shortages abound and many villagers have been given poor quality land that cannot sustain rice cultivation. Thousands more people are expected to be relocated in the coming five years due to project-induced flooding. According to Lao laws, these villagers have the legal right to know when and where they will be moved. However, there are no clear plans publicly available outlining these details or providing information about how people will be able to grow sufficient food for their families at the new sites.

"Without adequate livelihood restoration programs in place, economic insecurity and chronic food shortages are likely to become serious problems for affected communities," said Ms. Lee, who has visited affected villages several times over the past year.

The Theun-Hinboun Power Company is jointly owned by the Government of Laos, the Norwegian state-owned company Statkraft and GMS Power of Thailand. The US$585.5 million Theun-Hinboun Expansion Project is financed by four Thai commercial banks, Australia's ANZ Bank, France's BNP Paribas Bank, and public investments from France, Germany and the Netherlands.

"Project financiers such as ANZ Bank and BNP Paribas have an obligation to ensure that the Theun-Hinboun Power Company fully restores the livelihoods of all affected communities. Action plans for relocating downstream communities should be immediately released to the public and independent monitors should be established to ensure that commitments by the project developer are upheld," concluded Ms. Lee.