State-owned Electricite de France (EDF) has withdrawn from a project to build the US$1.1B Nam Theun II hydroelectric dam in Laos.
The statement issued by edf said that its International board had decided to withdraw from the project and therefore will not sign the US$5B power purchase agreement with EGAT, Thailand’s electricity generator. It said that the decision followed advice from its strategic committee and state officials and was in line with its strategy of consolidating its assets and refocusing its priorities on Europe.
The withdrawal by EdF, the biggest investor (35%) and the lead technical agency for the dam building consortium, raises serious doubts about the future of the 1070MW project. Laos had hoped the dam would provide up to US$80M a year in export revenues.
Environmentalists have long opposed the massive project, which they say would displace 5000 people and affect the lives of another 130,000 downstream, without any guarantee of adequate compensation.
Energy officials in Thailand, which faces power shortages in years to come, said they would wait a year for Laos to identify another investor, before drawing up plans for alternative sources of power.