French firm EDF says that construction of the 1070 MW Nam Theun 2 hydropower plant in Laos is 85 per cent complete and is on track to be brought into operation at the end of 2009.

EDF, which is constructing the controversial project, has closed the Nam Thuen river diversion tunnel to allow filling of the reservoir to start. Main construction works have now finished and the next main phase will start in the summer with the closure of the dam floodgates.

Anti-dam campaign group International Rivers says that the filling of the reservoir has started before a number of outstanding issues have been resolved, leaving local villagers unequipped to face the dam’s impacts.

The filling of the reservoir will take place gradually over the rainy season, flooding a 3.5 billion m3 area on the Nakai plateau. Some 6200 inhabitants have been rehoused in 15 new villages, says EDF.

International Rivers says that delays and shortcomings in livelihood development programmes have increased the vulnerability of resettled villagers, who are coping with losses of land, livestock and resources in addition to displacement. There are still unanswered questions about where villagers will sell the vegetables they grow, and if more of their promised community forest area will be taken and zoned for other uses.

The organisation has also voiced concerns over the impact of the project on water quality.

Nam Theun 2 will be owned and operated by the Nam Theun 2 Power Company (NTPC), a 35 per cent subsidiary of EDF. The project is supported by the World Bank, the Asian Development Bank, the European Investment Bank and the French Development Agency, which have implemented strict contractual obligations on EDF and NTPC in terms of the prevention, reduction or compensation of the project’s environmental and social impact.

The rehoused Nakai plateau inhabitants will live in homes identical to those they have left and will benefit from new infrastructure, including electricity, drinking water, schools and community buildings.

EDF also says it will establish a laboratory for analysing and monitoring the water quality to give it a better understanding of the management of reservoirs in tropical areas.