The use of public participation and economic appraisal for public involvement in large-scale hydropower projects: Case study of the Nam Theun 2 Hydropower Project

Gaining public acceptance is one of the main issues with large‐scale low‐carbon projects such as hydropower development. It has been recommended by the World Commission on Dams that to gain public acceptance, public involvement is necessary in the decision‐making process (). As financially‐significant actors in the planning and implementation of large‐scale hydropower projects in developing country contexts, the paper examines the ways in which public involvement may be influenced by international financial institutions. Using the case study of the Nam Theun 2 Hydropower Project in Laos, the paper analyses how public involvement facilitated by the Asian Development Bank had a bearing on procedural and distributional justice. The paper analyses the extent of public participation and the assessment of full social and environmental costs of the project in the Cost‐Benefit Analysis conducted during the project appraisal stage. It is argued that while efforts were made to involve the public, there were several factors that influenced procedural and distributional justice: the late contribution of the Asian Development Bank in the project appraisal stage; and the issue of non‐market values and discount rate to calculate the full social and environmental costs.