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The dam was constructed in three stages, beginning in with stage I in 1968 and ending with the completion of stage III in 1984. The Mekong River Commission first implemented the dam project as part of the national development plan. The project was mainly focused on harnessing Lao PDR's hydropower potential, but it has also striven to achieve flood protection, implement lift irrigation, facilitate lake fisheries, and develop Lao PDR's tourism industry. The Nam Ngum Dam has a capacity of 155 MW and generates most of Laos' electricity, including all the power used in the capital, Vientiane. Additionally 70–80 percent of electricity created by the dam is exported to Thailand. The revenue from export accounts for about a quarter of Laos' foreign exchange earnings. The gross power revenues of the dam are approximately US$36 million annually. 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.

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