Hydropower, a significant renewable and sustainable resource in Lao PDR, is also the most likely to provide significant export revenue and increase macroeconomic growth for the country. The government of Lao PDR has prioritized developing the country's hydropower resources to boost the national economy and enhance social development.

With SEARCA’s Seed Fund for Research and Training (SFRT) support, Dr. Silinthone Sacklokham of the National University of Laos studied in 2007 the impact of the Theun-Hinboun hydropower project on agricultural production and communal natural resource management. The research was conducted at villages along the Hinboun River of Hinboun district, Khammouan Province.

The study found that the Theun-Hinboun hydropower project has changed the livelihood of the villagers along the Hinboun River. Since the project began operating in 2000, the floods appear to be more frequent and longer, affecting the wet season rice production. The villagers then opted to intensify dry season rice production through slash-and-burn agriculture. The practice however reduces the forest area, as well as the farmer’s income from non-timber forest products. The situation becomes more serious when water flows because it initiates riverbank erosion and the destruction of household gardens. In addition, the higher water level of the river led to difficulty in fishing, in turn affecting the livelihood and household nutrition of the rural community.

To address these concerns, it is then recommended that part of the income gained from exporting electricity be used to improve infrastructures such as irrigation schemes and farm-to-market roads as well as provide better support for rice, poultry and livestock production. These will help improve the livelihood of the affected communities, and make the hydropower project attractive both at the national and local level.