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Published on September 7, 2007

And the peoples of both countries stand to benefit.

The words "sustainable hydropower" reflect the growing recognition around the world that hydro projects need to benefit everyone involved: from the local villagers to the government; from the private or public investor to the energy consumer; from the country to the global community.

In the Lao PDR, the joint work between government, developers, donors, civil society and local communities is making it possible to develop financially-sound hydropower projects that are socially and environmentally responsible and will improve the living standards of its people.

Thailand, in turn, as the main buyer of energy from the Lao market, is showing its commitment to ensuring that the energy it is buying is socially and environmentally "clean"; that it is not supplying its thriving market with energy while damaging the environmental resources of its neighbour, but on the contrary, that it is helping its neighbour make the best use of its resources.

If we take a step back to look around the world, we can find examples that show that sustainable hydro can indeed benefit all stakeholders involved.

Hydropower, for example, can be one of the most efficient and cost-effective ways to generate renewable energy; it does not produce the same harmful emissions as fossil fuels, such as natural gas, oil or coal. It can also reduce the impacts of catastrophic events such as floods and drought. In this way, hydro shows it can be globally beneficial.

If soundly implemented, hydropower projects can also improve environmental management while mitigating impacts, and can help improve the living standards of the local people. Hydro can thus benefit local communities.

Moreover, sustainable hydropower can provide enduring economic benefits through sustained revenue flows that can allow countries like the Lao PDR to reduce poverty and ensure benefits to all its citizens. Hydro can have countrywide benefits.

However, poorly planned hydropower development can pose significant environmental and social challenges. They can have adverse impacts on the aquatic ecosystems, involve displacement of a considerable number of people and alter the ecological landscape of an entire area.

To avoid this, great efforts must be made to minimise the social and environmental impacts and to ensure that the economic benefits of hydropower projects will be shared equally.

All stakeholders can, and should, benefit from hydro. But challenges need to be properly addressed if they are to be overcome, and that is also everyone's responsibility.

In this context, perhaps the most current example in the region of sustainable hydropower is the Nam Theun 2 project being developed in the Lao PDR.

It is a project where all involved are watching hard to ensure that resettled villagers will experience improved living standards; that the country will have access to needed revenue to invest in poverty reduction programmes; that an ecologically-rich watershed will be protected; that investors will obtain forecasted profits; and that part of the Thai energy demand will be economically met, among other things.

This project is a continuation of the partnership between Thailand and the Lao PDR in the development of hydropower that has nearly two decades of history, and that is being strengthened with the first "Lao-Thai High Level Forum on Sustainable Hydropower Development" taking place in Bangkok today.

Lao and Thai authorities, private developers, donor organisations, civil society and the media have come together to share lessons on past hydro developments and discuss how to ensure future projects are environmentally and socially sound, as well as financially viable.

All sides have lessons to share and things to learn from each other. But more importantly perhaps, all sides have a responsibility to ensure that Laos develops its resources in a way that is beneficial to its environment and to the Lao people, while at the same time beneficial to the Thai population and investors, as well as the global community.

It is time to look beyond "one-off" benefits, or to think of benefits as only for some and not for others. We can and should aim for benefits for all involved.

This first high-level forum taking place today is a major step in this direction. It will, of course, now be up to all of us to ensure that sustainable hydro power does benefit us all.

Ian C Porter

The writer is the World Bank country director for Thailand, Cambodia, Laos, Malaysia and Mongolia, based in Bangkok.