Asia Times
Mar 26, 2008
By Andrew Nette PHNOM PENH - Cambodia has rejuvenated old plans to develop the country’s huge hydropower potential, big-ticket schemes to be led by Chinese investors which will simultaneously fill government coffers and have severe social and environmental impacts on local communities.
Like neighboring Laos in the 1990s, foreign donors, electricity-hungry neighboring nations such as Thailand and Vietnam and big business interests in China are all keen to transform Cambodia into a major hydropower generator. Previous plans for developing Cambodia's hydropower potential were put on hold due to political instability and the economic chaos that followed the 1997-98 Asian financial crisis.
But with recent rapid economic growth rates in the region - including Cambodia, which notched gross domestic product growth of around 10% in 2006 and 2007 - hydropower schemes are apparently back on the national agenda. Cambodian Foreign Minister Hor Namhong told a donor’s meeting last year that his government plans to make Cambodia into the "battery of Southeast Asia".
A 2003 plan developed by the Ministry of Mines, Minerals and Energy, with the support of the Mekong River Commission, estimated that Cambodia has the potential to generate 10,000 megawatts of energy for internal use and export. Almost 50% of that power would be generated from projects along the mainstream Mekong River, which runs through Cambodia.
Foreign donors continue to play an important supporting role, particularly the Manila-based Asian Development Bank (ADB) through its so-called Mekong Power Grid Plan, a plan it has been pushing since the early 1990s which envisages an interconnected power grid across the entire region.
The ADB predicts that Cambodia will initially be a net electricity importer but will become a net exporter once the country's full hydropower potential is realized. However, local and international environmental and other groups are warning that large-scale hydropower development could create serious problems, impacting on some of the country's most pristine ecosystems and reducing water flow and fisheries with major consequences for the livelihoods of thousands of people.
"We are not against development or hydropower," said Ngy San, deputy executive director of the NGO Forum, an umbrella body of nongovernmental organizations. "What we want to do is to ensure poverty reduction and sustainable development, which is also the government's plan.
"We are also working to ensure that Cambodian decision-makers will learn the lesson of other countries in relation to hydropower, and not repeat those mistakes," said San. What is potentially different for Cambodia is the role China is expected to play in developing the resources.
China’s and Cambodia’s political and economic ties have grown enormously over the past decade. China is the nation's single largest investor, and Chinese state companies, often financed by state-owned financial institutions such as the Chinese Export-Import Bank, are the main players in hydropower dam development.
Phnom Penh has identified about 14 priority projects, of which six are under development - all by Chinese companies. For instance, China's Sinohydro is building a 145-meter dam on the Kamchay River in Kampot province, representing Beijing’s biggest investment in the country.
There is no disagreement among officials and activists that Cambodia needs to generate more power. Currently, only 20% of the population has access to cheap, reliable sources of electricity, mainly in urban areas. Meanwhile domestic demand for electricity is estimated to be growing at around 20% per year.
"It is simple - development needs electricity," said Touch Seang Tana, an advisor to Cambodia's Council of Ministers and a fisheries expert. "Power is currently very expensive in Cambodia, particularly in regional areas that are the most disadvantaged."
The government wants to provide services to the rural communities, but this is difficult to do without electricity," he said. "The actual number of people impacted negatively [by dams] is small and overall the entire benefit to the nation is significant. The government has to balance all these factors.
" Activists strike a more cautionary note. "The rush to develop our hydropower potential needs very careful study," said NGO Forum’s San. "However, it must include consultation with impacted communities, and comply with all relevant national and international laws. There are some in the government that share our concerns, but they find it difficult to act because they are not the real decision makers."
NGOs complain that the decision-making process in relation to hydropower development lacks transparency. While a plethora of departments and regulatory bodies participate in the process, observers say the agenda appears largely to be set by the Ministry of Industry, Mines and Energy, with the direct intervention of Cambodian Prime Minister Hun Sen.
The lack of transparency is accentuated by China’s involvement, critics say. "There is almost no information in the public domain on the financing arrangements for Cambodia's hydropower projects," stated a report released jointly in January by the US-based International Rivers Network (IRN) and the NGO Forum.
"The lack of information from the Chinese dam builders is very disturbing - they do not consult or share information," said Seng Bunra, country director for Conservation International in Cambodia (CIC). His organization works in the Cardamom Mountains Protected Forest Area, one of the largest continuous swathes of rainforest left in Southeast Asia and home to a number of globally endangered species.
According to the CIC, there are plans to build a number of dams in the protected area, all by Chinese companies. According to the plan’s critics, the number of hydropower projects scheduled for construction in protected forest areas illustrates the fact that existing laws are insufficient to protect the environment and affected communities.
The situation is particularly serious, notes the report by the NGO Forum and IRN, given that "compared against the already less than admirable environmental and social standards of Western bilateral donors and export credit agencies ... Chinese institutions are noticeably weaker".
One of the projects under scrutiny is the proposed Sambor dam on the mainstream Mekong in central Kratie province. A number of construction options are being studied, including one that would only block between one-quarter to one-fifth of the river and have, according to Council of Ministers adviser Tana, only "minimal" impact.
NGO Forum’s San concedes that there are mixed views about dam-building and the economic impact involved for the potential affected communities. "Is there a real need for electricity in Thailand? Yes. But have the economics been thought through, have any preliminary contracts for power export from Cambodia to Thailand actually been signed? No. We want to see a good economic analysis, including a full cost-benefit analysis before projects go ahead," San said.
(Inter Press Service with editing by Asia Times Online)
Mar 26, 2008
By Andrew Nette PHNOM PENH - Cambodia has rejuvenated old plans to develop the country’s huge hydropower potential, big-ticket schemes to be led by Chinese investors which will simultaneously fill government coffers and have severe social and environmental impacts on local communities.
Like neighboring Laos in the 1990s, foreign donors, electricity-hungry neighboring nations such as Thailand and Vietnam and big business interests in China are all keen to transform Cambodia into a major hydropower generator. Previous plans for developing Cambodia's hydropower potential were put on hold due to political instability and the economic chaos that followed the 1997-98 Asian financial crisis.
But with recent rapid economic growth rates in the region - including Cambodia, which notched gross domestic product growth of around 10% in 2006 and 2007 - hydropower schemes are apparently back on the national agenda. Cambodian Foreign Minister Hor Namhong told a donor’s meeting last year that his government plans to make Cambodia into the "battery of Southeast Asia".
A 2003 plan developed by the Ministry of Mines, Minerals and Energy, with the support of the Mekong River Commission, estimated that Cambodia has the potential to generate 10,000 megawatts of energy for internal use and export. Almost 50% of that power would be generated from projects along the mainstream Mekong River, which runs through Cambodia.
Foreign donors continue to play an important supporting role, particularly the Manila-based Asian Development Bank (ADB) through its so-called Mekong Power Grid Plan, a plan it has been pushing since the early 1990s which envisages an interconnected power grid across the entire region.
The ADB predicts that Cambodia will initially be a net electricity importer but will become a net exporter once the country's full hydropower potential is realized. However, local and international environmental and other groups are warning that large-scale hydropower development could create serious problems, impacting on some of the country's most pristine ecosystems and reducing water flow and fisheries with major consequences for the livelihoods of thousands of people.
"We are not against development or hydropower," said Ngy San, deputy executive director of the NGO Forum, an umbrella body of nongovernmental organizations. "What we want to do is to ensure poverty reduction and sustainable development, which is also the government's plan.
"We are also working to ensure that Cambodian decision-makers will learn the lesson of other countries in relation to hydropower, and not repeat those mistakes," said San. What is potentially different for Cambodia is the role China is expected to play in developing the resources.
China’s and Cambodia’s political and economic ties have grown enormously over the past decade. China is the nation's single largest investor, and Chinese state companies, often financed by state-owned financial institutions such as the Chinese Export-Import Bank, are the main players in hydropower dam development.
Phnom Penh has identified about 14 priority projects, of which six are under development - all by Chinese companies. For instance, China's Sinohydro is building a 145-meter dam on the Kamchay River in Kampot province, representing Beijing’s biggest investment in the country.
There is no disagreement among officials and activists that Cambodia needs to generate more power. Currently, only 20% of the population has access to cheap, reliable sources of electricity, mainly in urban areas. Meanwhile domestic demand for electricity is estimated to be growing at around 20% per year.
"It is simple - development needs electricity," said Touch Seang Tana, an advisor to Cambodia's Council of Ministers and a fisheries expert. "Power is currently very expensive in Cambodia, particularly in regional areas that are the most disadvantaged."
The government wants to provide services to the rural communities, but this is difficult to do without electricity," he said. "The actual number of people impacted negatively [by dams] is small and overall the entire benefit to the nation is significant. The government has to balance all these factors.
" Activists strike a more cautionary note. "The rush to develop our hydropower potential needs very careful study," said NGO Forum’s San. "However, it must include consultation with impacted communities, and comply with all relevant national and international laws. There are some in the government that share our concerns, but they find it difficult to act because they are not the real decision makers."
NGOs complain that the decision-making process in relation to hydropower development lacks transparency. While a plethora of departments and regulatory bodies participate in the process, observers say the agenda appears largely to be set by the Ministry of Industry, Mines and Energy, with the direct intervention of Cambodian Prime Minister Hun Sen.
The lack of transparency is accentuated by China’s involvement, critics say. "There is almost no information in the public domain on the financing arrangements for Cambodia's hydropower projects," stated a report released jointly in January by the US-based International Rivers Network (IRN) and the NGO Forum.
"The lack of information from the Chinese dam builders is very disturbing - they do not consult or share information," said Seng Bunra, country director for Conservation International in Cambodia (CIC). His organization works in the Cardamom Mountains Protected Forest Area, one of the largest continuous swathes of rainforest left in Southeast Asia and home to a number of globally endangered species.
According to the CIC, there are plans to build a number of dams in the protected area, all by Chinese companies. According to the plan’s critics, the number of hydropower projects scheduled for construction in protected forest areas illustrates the fact that existing laws are insufficient to protect the environment and affected communities.
The situation is particularly serious, notes the report by the NGO Forum and IRN, given that "compared against the already less than admirable environmental and social standards of Western bilateral donors and export credit agencies ... Chinese institutions are noticeably weaker".
One of the projects under scrutiny is the proposed Sambor dam on the mainstream Mekong in central Kratie province. A number of construction options are being studied, including one that would only block between one-quarter to one-fifth of the river and have, according to Council of Ministers adviser Tana, only "minimal" impact.
NGO Forum’s San concedes that there are mixed views about dam-building and the economic impact involved for the potential affected communities. "Is there a real need for electricity in Thailand? Yes. But have the economics been thought through, have any preliminary contracts for power export from Cambodia to Thailand actually been signed? No. We want to see a good economic analysis, including a full cost-benefit analysis before projects go ahead," San said.
(Inter Press Service with editing by Asia Times Online)
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