ADB Response Regarding Mekong Power Grid and Policy Violations

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Infrastructure Division

Ms. Susanne Wong,
Southeast Asia Campaigner
ti International Rivers
1847 Berkeley way
Berkeley, CA 94703
Fax No.: 1 510 848 1008

Dear Ms. Wong,

Thank you for your letter of 28 January 2004 addressed to President Chino, who has asked me to respond on his behalf.

We concur with your observation that development of the Mekong Power Grid should not be rushed. The Mekong Power Grid is not yet a project but only an indicative study. Therefore, the indicative study we have undertaken does not constitute a commitment to ADB financing for power transmission lines in the Greater Mekong Subregion. Projects proposed to ADB by member governments will be considered very carefully on a case-by-case basis. In each instance, we will undertake a comprehensive study of the proposal to ensure that it is technically, financially and economically viable. ADB will only support projects that adhere to our strict environmental and social policies, and that are developed with the participation of residents of affected areas and other stakeholders.

An integrated subregional grid can produce many benefits, and it is for this reason that ADB is exploring possibilities with member governments. Experience in other regions of the world clearly shows that an integrated grid can improve power network reliability, reduce overall generation capacity requirements, lower required investments for power reserves to meet peak loads, reduce greenhouse gas emissions, and improve overall economic competitiveness of the countries involved. Further, a power grid transmits electricity regardless of how it is produced – electricity generated by hydropower projects represents just one option.

I hope the above explanation addresses your concerns. In the interest of promoting transparency and informed public discussion of these issues, might I suggest that you consider posting earlier correspondence from ADB on your web site, as you have done with World Bank correspondence on the Nam Theun 2 Project (see: In this regard, I refer to my letter of 22 September 2003, and the letter from Khalid Rahman dated 3 December 2003.

We appreciate your continued interest in ADB’s GMS initiatives, and look forward to continuing dialogue with you.

Sincerely yours

Jong-Inn Kim
Project Engineer
Infrastructure Division,
Mekong Department
Asian Development Bank