Despite the risks to the world's biggest freshwater fish, Laos has rejected calls for a dam moratorium on the lower reaches of the Mekong because it wants cheap power to develop its economy.

The south-east Asian nation moved this week to secure regional approval for the first major hydropower plant on its stretch of the river in the face of protests from international conservation groups.

Catfish the length of cars and stingrays that weigh more than tigers are threatened by the proposed 800m barrier, but the government said the economic benefits outweigh the environmental risks.

"We don't want to be poor any more," said Viraphone Viravong, director general of the country's energy and mines department. "If we want to grow, we need this dam."

In a submission to the Mekong river commission (MRC) on Wednesday, Laos said it wants to build a 1.26GW-hydropower plant at Sayabouly in northern Laos to generate foreign exchange income.

If approved, about 90% of the electricity would be sold to neighbours Thailand, Vietnam and Cambodia.

It is part of a major plan to expand the economy through the utilisation of natural resources. According to Viravong, 20% of Laos' GDP will come from hydropower and mining by 2020, up from about 4% today.

Sayabouly is the first of 11 proposed dams on the lower reaches of the Mekong, a river that is already heavily dammed upstream in China.

The MMRC – made up of representatives from Laos, Cambodia, Vietnam and Thailand – will now assess the environmental impact of the project, but conservation groups fear the procedure is flawed and have called for a 10-year moratorium on hydropower on the river.

"This dam is the greatest challenge the MRC has faced since it was formed. It is the most serious test of its usefulness and relevance," said Marc Goichot, of the WWF. "It is already very clear this dam would amplify and accelerate the negative impacts of Chinese dams to the Mekong delta. What are the other impacts?"

Concerns have been raised about sedimentation, fisheries and the migration patterns of endangered freshwater species.

Four of the world's 10 biggest freshwater fish migrate up the Mekong to spawn. Among them is the Mekong giant catfish, which is the size of a bull shark, and the Mekong stingray, which can weigh up to 600kg.

The dam – which is being designed by Swiss company Colencois and the Thai contractors Karnchang – is also likely to affect the flow of nutrients along a delta that sustains tens of millions of people.

The Laos authorities insist the dam will be designed to mitigate the impact on food security, ecosystems and wildlife, but officials acknowledge that no solution is ideal for the environment.

"It won't be 100% perfect, but we believe mitigation measures will be effective. We must balance out the costs and benefits," said Viravong.

He felt there was no alternative. "We have done studies on micro-energy and renewables, but they are expensive. I don't think the world can subsidise that. If we do it ourselves, only cheap energy from hydropower will do."

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