Governments of the six countries that share the 4880-kilometer long Mekong River—China, Thailand, Cambodia, Laos, Vietnam, and Burma—have agreed to form a regional power grid that environmentalists fear would lay the foundation for an ambitious program of hydropower development.

The $4.6 billion plan will involve 32 projects including the construction of vast transmission lines to create a regional grid, encouraging private sector investment in power, and developing a regional system of power trading. Officials with the Asian Development Bank (ADB), which will provide loans for some projects, touts regional electricity trade for its “significant economic and environmental benefits”. For example, substituting coal and oil with hydropower, natural gas, and other energy sources will reduce emissions of greenhouse gases and other pollutants.

Although the ADB does not have a specific budget for hydropower investment in the region, hydropower development is likely to be one of its favored options. However, officials stress that any project must meet its guidelines on environmental and social safeguards.

“If you are going to develop hydropower, you have supply countries like Laos and demand countries like Thailand and Vietnam,” says Rajat Nag, director-general of the ADB’s Mekong Department. “It makes much more sense to take a regional, holistic approach.”

Environmentalists are concerned that this agreement is the first step toward a fresh spurt of dam building in the Mekong basin. “Further dam development along the Mekong and its tributaries will result in destruction of the valuable Mekong fisheries, widespread downstream erosion, flooding of important conservation areas, increased flooding downstream, and reduction of soil fertility along the banks of the river and in the Mekong delta,” says Aviva Imhof, director of the Southeast Asia Program of the International Rivers Network, a campaigning organization. Already, at the Theun-Hinboun hydropower project in Laos, fish stocks in affected rivers have fallen as much as 90%, and severe erosion along the river downstream of the dam has resulted in the loss of farmland, riverbank vegetable gardens, and the destruction of fisheries, says Imhof. — MARIA BURKE