SBR- Content.pmd - INBO

State of the Basin Report - 2003responsibility of the IPPs to secure the funds needed to develop projects. Here again there areproblems. As governments privatise, the electric utilities that buy power from producers will requireproducers to bid against each other on a regular basis. Without long-term guarantees from utilities tobuy their power at a profitable fixed price, it will be difficult for IPPs to raise the substantial fundsneeded to develop hydro projects.4. 2 Undeveloped power marketMost of the hydropower potential in the Lower Mekong Basin is in Lao PDR and Cambodia, butboth of these countries do not have a large enough domestic market (demand) to warrant developinglarge-scale projects. For the foreseeable future, domestic demand could be satisfied with thedevelopment of small-scale projects.It is expected that in future a regional power network will be developed connecting all the nationalpower systems in the Greater Mekong Sub-region. Under these conditions there will likely be amarket for the Mekong Basin’s hydro potential. But this is a long-term goal, and at this time, it isdifficult for a number of technical and political reasons to create an integrated power system. Inthe short term, only isolated hydro projects, intended largely for export to a single country, arelikely to be developed. Even in these cases, developers must demonstrate that their projects arecompetitive with projects using fossil fuels – something that will be difficult to do for the reasonsjust given.4.3 Environmental and social impactsDevelopment of the Lower Mekong Basin’shydro potential is also likely to take some timebecause extensive investigations are neededprior to construction to ensure that dams willnot have serious adverse effects on theenvironment and/or human welfare. Prior to thedevelopment of hydro projects, investigationsof the actual environmental situation andassessments of negative as well as positiveimpacts have to be undertaken and carefullyevaluated in order to judge whether a projectwill be acceptable or not. Unfortunately, thebenefits and negative impacts of hydro projectscannot be measured on a common scale. Toooften emphasis is placed on the economicbenefits or on certain negative impacts, withouta balanced appraisal of both. Also, due todifferences in standards between countries, itis difficult to judge the transboundary impactsthat projects may have.Dams and reservoirs alter the ecology andbiodiversity of a river system212