The Nam Ngum Dam has a capacity of 155 MW and generates most of Laos's electricity, including all the power used in the capital, Vientiane.

Recent studies have indicated that the dam has adversely affected lake fishery and the Nam Ngum River ecosystem.

Responsibility for operation of the project rests with the national power utility Electricité du Laos, a state enterprise under the Ministry of Industry and Handicraft.

[1] Today, the Lao PDR's hydropower potential is widely recognized as one of the country's main resources, since it enjoys a strategic location between the booming economies of China, Vietnam, and Thailand and rivers that contribute 35 percent of Mekong flows.

The Lao PDR has an estimated potential of some 18,000 MW from over 60 project sites on the tributaries of the Mekong River, of which less than 3 percent has been developed.

[1] In 1973 the government of Laos issued a feasibility study in order to fully plan of the NN1 project Stage II.

During stage II four spillway gates were installed, the full supply level was raised to 212 m elevation, and two 40 MW turbine-generator units were added to the power output.

[1] After completion of Stage II in 1978 the government of the Lao PDR realized that it had neglected to account for how the dam would affect the Nam Ngum river ecosystem, and the hundreds of thousands of people who relied on fishing for subsistence.

This included the construction of primary schools and water supply networks as well as the provision of gill nets and boat engines to selected villages.

This project facilitated the movement of tens of thousands of local fisherman to the banks of the Nam Ngum reservoir throughout the 1980s and 1990s.

This development is seen as critically important for meeting current and future energy demand in the rapidly growing cities and towns throughout the lower Mekong in Thailand, Vietnam, and Laos.

With these rising demands come the challenges of regional management of water resources and increased pressure upon surrounding ecosystems.

Whether or not hydropower-based economic development is consistent with other socioeconomic and environmental objectives in the Lao PDR (irrigation, fisheries, flood control) has scarcely been explored.

The issue is that the dam projects in the Nam Ngum are often independently planned and managed, with only minimal consideration of their cumulative and basin-wide economic and hydrological impacts.

The lack of coordination is evident in recent controversies and observed flood damages from poorly managed water releases during high flow events.

Nonetheless, the catch statistics available indicate that the reservoir fishery has progressively shifted from the large-bodied top-predators to small-bodied, low-value planktivores.

The data available evidences the trend of individual fishers experience more total catches, but lesser returns from the small fish harvested.

Specifically the dissolved oxygen levels in the water released from the reservoir are unfavorable for aquatic life most of the year, especially during the wet season.

Accordingly, the expected future economic returns from the Nam Ngum dam as well as agriculture expansion in the Vientiane province would be severely decreased in dry conditions.