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Laos has plans to build a new coal-fired power plant in Sekong province in the southeastern part of the country, raising concerns among local residents and environmental groups who fear damage to area farmland and forests, sources in the one-party communist state say.

Permission to carry out the project has been granted to the Singapore-based Evolution Power Investment Corporation (EPIC) working together with a Lao firm, the Khounmixay Bridge and Road Construction and Repair Company, an official of the Ministry of Energy and Mines told RFA on Tuesday.

“The company [EPIC] has just gained the concession,” the official said, speaking on condition of anonymity.

A large reserve holding up to 700 million tons of lignite, a soft coal, was found many years ago by a foreign company contracted to explore in Sekong’s Dac Chung district, the official said, adding “The reserve has been well studied since 2008.”

No company was financially stable enough to extract or make use of the coal until EPIC was approved on May 27 to carry out a feasibility study for the project, though, the official said.

Residents of Dac Chung gave different views of the power plant’s likely impact on the district, with one villager saying that work on the plant “will destroy the environment, including forests, trees, and grass.”

“It will also destroy farmland; and wildlife will become extinct,” the villager said.

“There won’t be any problems, because [the authorities] will have good measures in place for safety and protection,” another district resident said, citing approval for the project “from many different levels from the Ministry all the way down to local authorities.”

The project when completed will cover up to 100 hectares of forested land and will be a coal-fired thermal plant like a plant already built in Xayaburi province’s Hongsa district, and will definitely have a local impact, a Lao environmental expert said.

“For example, it will have an impact on the forests, the community, and on the natural environment,” the expert said, also speaking on condition he not be named.

The Lao government and the companies doing the work should collect and analyze information and carefully discuss what they learn before moving ahead with construction, he said.

Communities at risk

The 1,000 megawatt (MW) power plant will cost $1.7 billion to build, is scheduled for completion in 2027, and will export electricity to neighboring Thailand, Cambodia, and Vietnam, Lao sources said.

Laos’s first lignite plant, the 1,878 MW Hongsa power plant in Xayaburi province, opened in 2015 amid concerns about negative environmental impacts on farmland, sensitive forests,and the watershed in Laos and nearby Thailand. Almost all of Hongsa’s power is exported to Thailand, and the plant is mostly Thai-owned.

Health experts say local communities are at risk of cancer, respiratory problems, and birth defects from pollution. Hongsa’s construction entailed a land grab that resulted in thousands of villagers losing land with little compensation.

Laos has already built dozens of hydropower dams on the Mekong and its tributaries in its quest to become “the battery of Southeast Asia,” exporting the electricity they generate to other countries in the region, and is preparing to build scores more dams in the years ahead.

Though the Lao government sees power generation as a way to boost the country’s economy, the projects are controversial because of their environmental impact on fisheries and agriculture, and the displacement of villagers.