Being a land-locked, mountainous country, Laos has few options to diversify its energy sources. The Lao government believes that the hydroelectric energy program will be a source of income for fighting poverty, thereby achieving the so-called sustainable social and economic development of the country. The proposed Don Sahong hydropower project, therefore, is critical part of the Laos government’s hopes to transform the country into “the battery of Southeast Asia,” with revenues generated from exporting power to neighboring countries [6].

The project’s developer is Mega First Corporation Berhad (MFCB), a Malaysian engineering and construction company. In March 2006, MFCB signed a MoU with the Government of Laos to prepare feasibility studies for the project, and in February 2008 the Project Development Agreement was signed. MFCB obtained this way the permission to enter into advanced negotiations and finalize the project details with the Government of Laos and potential electricity buyers, to be concluded by September 2009. The other members of the Mekong River Commission, like Thailand, Vietnam and Cambodia, were notified about the project only in Sept 2013. By doing this, Laos bypassed the regular procedure of prior consultation which would allow the other countries to discuss together benefits and costs of the project.

Negative consequences of the plant range from impacts on fish population as it would create a barrier, as well as on the hundreds of thousands of people living along the Mekong River and its tributaries throughout southern and central Laos, as well as in Cambodia, Vietnam and Thailand.

The dam will also have impacts on the rare Irrawaddy dolphins, a species already severely threatened.

The government of Laos had previously proposed the rare ecosystem of the island as a RAMSAR area, which could bring interesting touristic attention on biodiversity and protection of the habitat. A hydroelectric project there would jeopardize such scenario and not make the area eligible for RAMSAR registers.

According to International Rivers, the proposal to develop the Don Sahong project has generated considerable concern amongst the public within the Mekong Region and internationally. In April 2007, as plans for the project first came to light, 28 NGOs sent an open letter to the Government of Laos, the Mekong River Commission and its member governments calling for the project to be reconsidered. An other letter was sent to the Government of Laos in May 2007 by 34 scientists [1], urging decision-makers “to consider the weight of scientific evidence that will show the Don Sahong project to be hugely destructive, such that even the economic (including livelihood) costs outweigh the net benefits – even before the environmental impacts are taken into consideration.”

The Mekong River Commission announced in July 2014 the start of the "Prior Consultation" with the other member states [2], but later on it decided that the process should be undertaken at the governmental level because they could not reach a common conclusion on how to proceed with the project.

Up to Oct 2015, ministerial meetings on the issue are still taking place [5], while Mega First seems to have already signed an agreement with Laotian utility Electricite du Laos to regulate its participation in the hydel project. Per the agreement, Ground Roses Ltd., Silver Acreage Ltd. and Electricite du Laos (EDL) would hold 79%, 1% and 20% shares in the Don Sahong Power Company Ltd., respectively. The company will operate as a unit under Mega First [3].

NGOS and local environmentalists are calling for more adequate studies on the impacts and on the benefits and costs the project would entail for riverine communities, especially downstream the plant [4].