This document discusses the case of the Xayaburi Dam in Lao PDR and whether capital or institutions will have more influence over hydropower development on the Mekong River. The Xayaburi Dam is a $3.5 billion project that will impact fisheries and communities. While institutions like the Mekong River Commission have raised environmental concerns, the large capital investment and Lao PDR's development goals of attracting foreign direct investment make completing the dam likely. The document analyzes the financing framework of the dam project and investigations into its approval process. It concludes that capital held more influence than institutions in this situation due to path dependencies and the large sums of money involved.

1. Capital
or
Institutions
which speaks more loudly?
The Case of the Xayaburi
Dam in Lao PDR
Honors Thesis Presentation
Eli Powell
Faculty Mentor: Prof. Mark
Giordano

2. Research Question
Will Capital or Institutions speak
more loudly in deciding the fate of
hydropower development on the
Mekong Mainstream?
This question was explored within
the context of the case study of the
Xayaburi Dam, located in Lao PDR.

3.  Arises in the Tibetan
Himalayas: flows for 4,600
km through China,
Myanmar, Lao PDR,
Thailand, Cambodia, and
Vietnam; the delta empties
into the South China Sea
 Basin spans over 795,000
km3
 Relatively narrow basin
shape, does not fan out until
the far lower reaches
 5 distinct geographic zones
Mekong River Basin

4. Mekong Hydrology
 Highly Seasonal Flow dependent on the Southeast
Asian Monsoon, producing pronounced wet and
dry seasons
 Volume of 475 mil. m3 during the wet season
 Creates unique morphological conditions, e.g.,
Tonle Sap

5.  Over 850 unique species
 The world’s largest inland fishery
 Capture fishery worth more than US $4 Billion at
retail
 Fish form the basis of the diets and livelihoods
for millions
Mekong Fisheries

6. Hydropower Development
in the Lower Mekong Basin
 Origins lie with the Mekong Project in the 1950s
 A plethora of dams have been constructed, are under
development, and being discussed basin wide
 11 planned, 1 of which is under construction, on the
mainstream
 Represents a massive
influx of FDI into the
region

8. Tensions of Development
 Two dominant economies- Thailand and Vietnam
 Two periphery states- Lao PDR and Cambodia
 Hydropower developments on the mainstream are predicted
have substantial negative effects on the fishery
 However, they could help alleviate energy poverty in the
region and spur further development
 Several groups are calling for a halt of hydropower
developments on the mainstream; Massive amounts of capital
already invested in utility developments.

9. Research Question
Will Capital or Institutions
speak more loudly in deciding
the fate of hydropower
development on the Mekong
Mainstream?

10. Literature Review
Pros/Cons of
Mekong Dam
Development
Institutional
Theory
Business-Case
Analysis
Lao
PDR/Xayaburi
Dam
- Potential for
dramatic reductions
in fish catch
- Losses up US $476
million per year
- Increases in FDI in
Lao PDR
- Reducing energy
poverty in the region
- Little Discussion
of potential
economic impacts
of the Xayaburi
Dam alone
- Rules and norms
based institutions
dictate who sits at
the table
- Path Dependency
- Institutional Inertia
- Cultural norms
- Applied to the
decision making of
the MRC, Lao
PDR, and other
organizations in
the LMB in the
debate over
Xayaburi
- Case study
methods, which
allow to study the
subject matter in
context
- Historical/Chronolog
ical Framework
- Style of analysis
applied in
understanding the
financing of
capital for the
Xayaburi Project
- Set a development
goal to exit the LDC
group of countries
by 2020
- Xayaburi Dam,
represents a US
$3.5 Billion
investment
- Trans-border
Financing
- Lao PDR’s
development goals
sync with the
investment
structure for the
Xayaburi Project

11. Xayaburi Dam

12. Framework

13. Bucket A: Approval, Financing, and
Investment of the Xayaburi Dam
Total of over US $3.5 Billion of FDI from Thailand into Lao PDR

14. Bucket B: Mekong River
Commission

15. Bucket D: Foreign Direct Investment in the
Utility Sector in Lao PDR
 Government of Lao set a development goal back in 1996 to
exit the group of least-developed countries by 2020
 The Xayaburi Dam represents a FDI of US $3.5 Billion
 The World Bank funded transmission lines built in Lao, but no
hydropower projects
 Disregard for the potential negative side effects

16. Bucket D: Investigations and
Court Challenges to the PPA
 Three Thai government bodies investigating the
approval to the PPA with respect to its compliance
with Thai law
 Arguments hold the approval of the PPA was
unconstitutional and illegal
 Results and decisions have not yet been released
 Suggest further impact assessments on the trans-
boundary impacts and public consultations should
have been part of the process

17.  The Dam will likely be completed no matter what
decisions the Thai investigations reach
 Institutional path dependency in several
organizations involved- chiefly the MRC and the
Government of Lao
 Power of $$$
 Pöyry Energy AG faulty compliance report and
Compagne Nationale du Rhône peer review of the
report -> Lao PDR has made its mind up
Conclusions

18.  Overall money speaks louder than institutions in
the Lower Mekong Basin
 Triggered a positive-feedback loop within Lao
PDR’s path dependency
 Implications for future BOOT projects in Lao
PDR
Conclusions