Vientiane, Laos - A Malaysian firm has been granted permission to build a 130-megawatt dam in north-western Laos on a tributary of the Mekong River, state media reports said Monday.
Malaysia's Asia Pacific Business Lin Snd Bhd Co Ltd (AP Bizlink) last week signed an agreement with Laos' Ministry of Planning and Investment to construct the dam in Luang Namtha and Bokeo provinces over the next four years, the Vientiane Times reported.
The 145-metre-tall dam would create a 2,825-square-kilometre catchment area on the Nam Pha River, a tributary of the Mekong, South-East Asia's longest waterway, which passes through southern China, Laos, Myanmar, Thailand, Cambodia and Vietnam.
AP Bizlink chairman Zakaria bin Dato Ahmad said the project would contribute to meeting the electricity demands of northern Laos and attract foreign investment to the area.
No details were provided on the cost of the dam nor the Malaysian firm's plans for conducting a social-environmental impact study on the project area or on the Mekong.
China has already built four large hydroelectric dams on the upper Mekong, but none have yet been built on the South-East Asian segments of the river.
The Mekong River Commission - of which Cambodia, Laos, Thailand and Vietnam are members - has warned that all dams on the middle and lower Mekong River would have an adverse impact on fisheries, which provide an estimated 2 billion dollars each year in revenues for people living off the river.
'Current fish passage technology would not be effective in maintaining the migration of the large number and diverse fish species found in the Mekong,' the commission concluded in a study conducted by a group of scientists in 2008.
'In view of this conclusion and the assessment of the value of the Mekong's fisheries, the group concluded that dams on the mainstream in the middle and lower part of the Mekong will have a major impact on the fisheries and serious economic and social implications,' the commission warned.
Less research has been done on the impact of dams on tributaries of the Mekong. Communist Laos, which has said it aspires to be the 'battery of South-East Asia,' plans to build about 20 hydropower plants on its rivers by 2020.
A mountainous country rich in water resources, Laos currently has 14 hydropower plants with a combined capacity of 2,540 megawatts, much of which is exported to neighbouring Thailand.
