Laos

Laos has signed a land deal for a 390-MW hydroelectric project in the south of the country to supply electricity to Thailand. While final decisions are still awaited for the Xayaburi Dam project, the new USD1.25 billion project in Attapeu and Champassak provinces is expected to start in July.

At yesterday’s opening session of 19th Mekong River Commission (MRC) Council Meeting, being held in the Laoation city of Luang Prabang, heated debate occurred over the host country’s construction of the Xayaburi Dam and its plans to build a cascade of dams on the Lower Mekong River. According to participants at the meeting, MRC governments disagreed about the prior consultation procedures and how they had been applied in the case of the Xayaburi Dam. The Cambodian delegation asserted that Laos had misinterpreted the Mekong Agreement and that the prior consultation process had never been completed.

In a move reflecting the realization of the greater risk of flooding through climate extremes the Asian Development Bank (ADB) and Australian Agency for International Development (AusAID) has put together a USD87.4 million aid package for Laos and Vietnam.

The Asian Development Bank is considering providing funds to a controversial 400-MW dam project on the Xekong River, a major tributary of the Mekong River, which could have adverse downstream impacts. Last week the Lao government signed a concession agreement with the Xe Pian Xe Namnoy Power Company, in which Ratchaburi Electricity Generating Holding – Thailand's largest private power producer – holds a 25 percent stake. Another 26 percent is held by Korea’s SK Engineering and Construction, 25 percent by Korea Western Power and 24 percent by Lao Holding State Enterprise.

A somewhat contrarian piece of research suggests agriculture in Asia could benefit from climate change. Following numerous doom-laden reports on the effects of extreme weather conditions on populations and economies in the region, scientists from the International Water Management Institute (IWMI) have predicted increased rainfall and temperature due to climate change could bring benefits to south-east Asian agriculture. This contradicts the more common expectations that a warmer planet will reduce agricultural productivity in the region.