6.1 Benefits to the Lao PDR
On the basis of the agreed Tariff Memorandum of Understanding, signed with EGAT in August 2000 (and as extended in February 2002 and as incorporated within the EGAT Power Purchase Agreement), the Project's gross electricity sales to EGAT are forecast to average approximately USD 220 million per year over the life of the Concession based on the long term hydrological conditions of the Nam Theun River.
The GOL’s share in these revenues is estimated to be approximately USD 2,000 million in nominal terms over 25 years, net of all debt repayment and operating costs. This amount is received through dividends, tax and royalty charges. After the end of the concession period, following the transfer of the Project to GOL, all revenues will accrue to the GOL.
According to the Economic Impact Study undertaken by Louis Berger International, the Project will contribute to increasing the country's Gross Domestic Product by a cumulative total of 3.2% over the concession period. Overall, by means of a development policy prepared with the assistance of the World Bank, and with the creation of the required social funds, the sustainable net revenues accruing from the Project to the GOL will positively impact economic growth and allow for much-needed poverty alleviation. .
In addition, 75 MW of competitively priced power will be made available to EDL from the Project. As part of the Project, NTPC will also improve specified roads that may be impacted during construction, and reimburse the construction of a 115kV transmission line and a substation at Thakhek for EDL. The generation and transmission facilities thus created will form a nodal point for the possible future establishment of a Lao national interconnected grid. All of these elements will directly contribute to the long-term economic development of the central provinces of the Lao PDR.
6.2 Benefits to the Local Population
The affected communities on the Nakai Plateau will benefit from new and significantly improved infrastructure, financed and built as an integral part of the Project. All resettled communities from the reservoir area will fully benefit from:
* new villages and housing, designed and laid out as a direct result of the Public Participation and Consultation Process with an emphasis on both tradition and
women’s participation in housing design;
* permanent roads, allowing all-year-round access to and from the local and regional markets;
* clean domestic water;
* power distributed by EDL through a low voltage network to be built by the Project;
* irrigation facilities using water available from the reservoir, with electric pumps installed and maintained at NTPC’s expense for the whole duration of the
* new and improved schools, health facilities and community buildings;
* technical assistance to improve agricultural methods;
* participation in the Nakai Forestry Association, a community based organisation which will manage and sustainably harvest timber from designated areas
adjacent to the relocated villages;
* access to the reservoir for fishing; and
* employment opportunity and technology transfer.
With a budget of approximately USD 20,000 per affected household on the Nakai Plateau, the Project’s Resettlement Action Plan is widely recognised as one of the most thorough and adequately funded of its kind.
TThe affected communities in the downstream areas from the Project will benefit from the permanent availability of the water discharged through the downstream channel and into the Xe Bang Fai. The regulating pond and the downstream channel have been designed to allow for the maximum use of gravity irrigation in the fertile Gnommalat plain.
Further downstream, all the villages along the Xe Bang Fai will be able to access water from the river all year long at a much lower cost due to increased water elevation and flows in the riverbed during the dry season. In addition, the opportunity for all the downstream communities to irrigate their rice paddies during the dry season will enable them to have a second harvest each year and to obtain much higher yields per hectare.
All the affected communities, both on the Nakai Plateau and in the downstream areas, will also potentially benefit from a wide range of low to medium qualification labour opportunities directly resulting from the Project, during both the 5 year construction phase and the 25 year operating period.