The Asian Development Bank (ADB) is one of the most influential development institutions in the Greater Mekong sub-region in the push to build large-scale infrastructure including hydroelectric dams. Controversies over big dams in Asia have unveiled the lack of effective governance mechanisms through which all stakeholder interests can be taken into account in resource management decision making. In the case of the Theun-Hinboun hydropower project in Lao PDR, the actions of the ADB have showed inadequacies regarding the project decision making and implementation processes although the project has been economically successful and the ADB has enhanced the country's capacity build-up. The aim of the article is to review the history of the Theun-Hinboun project and identify areas that need to be strengthened recognizing future planning needs, and to identify important future lines of study at Theun-Hinboun. Good governance can be enhanced by institutionalizing participation at the project, district, provincial and national levels including improving inter-agency coordination. An institutional mechanism, which ensures that revenue from the export of hydropower is actually used for poverty alleviation, is needed.

The results of the household survey (n=1602) analysis suggest that a poverty–environment nexus exists in the Lao PDR but the nexus depends on the environmental problem. The most explicit relations were those between poverty and using fuelwood for cooking, and poverty and access to safe drinking water, whereas recent negative changes regarding deforestation and land erosion exhibited only a weak connection. Outdoor air pollution was the most common problem experienced, although no connection to poverty was found. The two most common recent improvements were related to indoor air quality and sanitation, and they had been more prevalent for wealthier households.

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PurposeThe purpose of this paper is to analyse social and environmental sustainability considerations developed in Lao People's Democratic Republic (Lao PDR) and to identify problems and challenges related to sustainable hydropower planning and development.Design/methodology/approachThe paper is leaning on empirical analysis based on analysing primary and secondary data and information; official government documents and relevant literature, a series of workshops of the Future Resource and Economy Policies in Laos till 2020 Project (FREPLA2020), and interviews with government officials and experts.FindingsTo achieve its socio‐economic objectives, Lao PDR needs to manage its hydropower development to ensure environmental and social sustainability through developing of the legal, institutional and regulatory environment and strengthening of the institutional capacity of the sector, improving knowledge and data management, and developing institutional coordination across the government agencies.Practical implicationsThe paper suggests that the Lao government assesses strategically the hydropower development options, prepares capacity building plans, develops risk assessment and management, and learns from past hydropower developments.Social implicationsThe paper recommends using hydropower development generated revenues to poverty reduction activities and to strengthen participatory approaches.Originality/valueThe paper can act as a discussion awakener, to help and give some guidance to decision makers and actors in the hydropower sector to integrate sustainable development considerations into hydropower development and planning.

Lao People's Democratic Republic (PDR) has large hydro-power potential with estimates varying from 18,000 MW to 30,000 MW, out of which only two percent (667,5 MW) has been developed so far. Despite the fact that the hydropower sector has played a pivotal role in the economic development of Lao PDR, planning, selection and implementation processes for hydropower projects have tended to be ad hoc in character, have experienced insufficient transparency and have not delivered the full potential benefits to the development of the country. Whereas substantial improvements in policies, legal requirements and assessment guidelines have occurred, hydropower planning and development still need a lot of improvement. Some major problems relate to capacity and institutional environment, such as insufficient quality of environmental and social assessments, ineffective regulatory framework, a lack of transparency, and the failure to conduct comprehensive consultations with all stakeholders.Hydropower development in Lao PDR and in the whole Mekong Region needs to be sustainable, which will require minimal adverse social and environmental impacts, while remaining a viable, profitable and source of renewable energy supporting the country's economic development. Hydropower development should also better respond to the realities of regional energy market. Hydropower must be developed cautiously in the context of broader development goals, including responsible environmental management, institutional development, poverty alleviation and social development along with integrated water and energy management. Sustainable development of hydropower requires the integration of economic and social development and environmental protection and the need to take into account the values of efficiency, participatory decision-making, sustainability, accountability along with precautionary approach to environmental management and eco-efficiency. The purpose of the paper is to identify key challenges related to sustainable hydropower planning and development in Lao PDR. The paper aims to contribute to the broader discourse on sustainable hydropower planning and development in developing countries.