State media in Laos says several people are dead and hundreds missing after a dam wall collapsed in the country's south, sending millions of tonnes of water into surrounding villages.

Key points: The floods have swept away homes and left more than 6,600 people homeless

The floods have swept away homes and left more than 6,600 people homeless The company on Monday warned the dam was unsafe because of overflows from recent rains

The company on Monday warned the dam was unsafe because of overflows from recent rains The dam project was still under construction and scheduled to begin operating this year

The Xe-Namnoy dam in Attapeu province, 550 kilometres south of the capital Vientiane, was reportedly built to hold 1 billion tonnes of water, and is 1.6 kilometres wide.

A volunteer emergency organisation, Vientiane Rescue, said the dam wall broke on Monday night after heavy monsoonal rains.

Reports on one media site said millions of tonnes of water had inundated surrounding land, washing away villages and homes.

Official Lao news agency KPL said more than 6,600 people were made homeless.

Photos on an expat site on Facebook show nearby residents on the roofs of houses as the floodwaters threaten to submerge their homes altogether.

Millions of tons of water had inundated surrounding land, washing away villages and homes. ( Facebook: LaoFAB )

Vientiane Rescue said it was sending a team of volunteers to respond to the disaster and help evacuate people stranded on roofs and higher ground.

Only on Monday the Xe-Pian Xe-Namnoy company warned the dam was dangerously unsafe because of overflows from the recent rains, and said it was planning to release 5,000 million litres of water.

It urged residents to evacuate low-lying areas immediately.

It is unclear whether the ensuing floodwater was deliberately released or caused by the wall's collapse.

Vientiane Rescue said it was too early to know how many people have died in villages downstream from the dam.

Volunteers helped evacuate stranded people to higher ground. ( Facebook: LaoFAB )

The dam was constructed by a joint venture led by South Korean companies, with Thai and Lao partners.

The project, scheduled to begin operating this year, was still under construction, KPL reported.

It described the portion that collapsed as a "saddle dam," which is an auxiliary dam used to hold water beyond what is held by the main dam.

In a statement, the Ratchaburi Electricity Generating Holding Public Company said the operating company for the "fractured" dam had helped evacuate nearby residents to temporary shelters.

"Currently, Xe-Pian Xe-Namnoy Power Company Limited and related agencies had evacuated the people who reside around the area to temporary shelter for safety in accordance to the emergency plan," the statement read. "In addition, urgent assessment of the situation is being made in order to be able to immediately resolve the situation once the water level of the dam has decreased."

The company said the dam was approximately 90 per cent complete and scheduled to commence commercial operation in 2019.

KPL also reported that Prime Minister Thongloun Sisoulith "suspended the planned monthly meeting of the Government for August and led his Cabinet members and other senior officials to Sanamxay [district] to monitor rescue and relief efforts being made for flood victims."

The South Korean company that has a stake in the project said part of a small supply dam was washed away and the company was cooperating with the Laos Government to help rescue villagers near the site.

Residents sit on the roofs of houses as the floodwaters threaten to submerge their homes altogether. ( Facebook: LaoFAB )

"We are running an emergency team and planning to help evacuate and rescue residents in villages near the dam," an SK Engineering & Construction spokesman said by telephone.

The $1 billion project was to build two dams with five auxiliary dams used to hold water beyond what is held by the main dams.

Another official of SK Engineering & Construction said the company ordered the evacuation of 12 villages as soon as it became clear that the dam could collapse.

Last year, another dam burst in the Xaysomboun province north of the capital Vientiane, which flooded surrounding villages.

A villager and dogs take refuge on a rooftop above flood waters. ( Attapeu Today )

For the thousands of people left homeless, it will be a struggle to find shelter from the ongoing monsoonal rains.

Dams are a crucial part of the Laotian economy, with much of the electricity exported to neighbouring countries.

The landlocked communist country has been criticised for its aggressive dam building — a national strategy to become the battery of South-East Asia.

The environmental costs are often discussed, and now locals are paying the price for providing other people's electricity.

ABC/wires