The Lao parliament has approved the concession agreement for the controversial Don Sahong hydropower dam and expects to begin construction before the end of the year, according to an official in Vientiane.

In a statement via email, Daovong Phonekeo, director general of the Energy Policy and Planning Department at the Lao Ministry of Energy and Mines, confirmed the country’s National Assembly had given the green light to the agreement with Malaysian developer MegaFirst.

He said a power purchase agreement between state-owned Electricite du Laos and the company was awaiting a signature and construction was expected to begin before the year’s end.

The 260-megawatt dam is about 2 kilometres upstream from Cambodia’s border. Cambodia, Vietnam and Thailand oppose its construction without further studies, citing the potential ecological impacts.

Laos says it’s put in place the necessary mitigation measures.

Environmental group International Rivers said it was concerned about the contract negotiations proceeding while regional discussions were still under way.