Hundreds of people are missing after a hydroelectric dam collapsed in southern Laos, destroying thousands of homes and leaving an unknown number of dead.

Five billion cubic metres of water – the equivalent of 2m Olympic swimming pools – swept through the surrounding countryside after the accident at the Xepian-Xe Nam Noy hydropower dam, which is still under construction in south-eastern Attapeu province.

The dam collapsed at 8pm local time (1300 BST) on Monday, a state news agency reported. The neighbouring villages of Yai Thae, Hinlad, Mai, Thasengchan, Tha Hin and Samong bore the brunt of flooding, which has reportedly destroyed thousands of homes.

Officials brought in boats to try to evacuate victims in San Sai district who were left stranded by the water. Aerial footage showed the whole region under muddy water, with only roofs and treetops visible.

Several people have been confirmed dead, and more than 6,600 are homeless, official news agency KPL reported.

The company building the dam said heavy rain and flooding caused it to collapse and it was cooperating with the Laos government to help rescue villagers.

“We are running an emergency team and planning to help evacuate and rescue residents,” a spokesman for SK Engineering & Construction told Reuters.

The dam is a key component of the country’s controversial ambition to become the “battery of Asia” by selling power to its neighbours. Eleven large hydropower dams on the main Mekong River, and 120 tributary dams, are planned over the next 20 years.

The 410MW project was designed to generate electricity by diverting the waters of the Houay Makchanh, Xe-Namnoy and Xe-Pian rivers on the Bolaven Plateau in the Laos province of Champasak, and then letting them flow back into the Xe-Pian River, and eventually into the Mekong.

The plan is to export 90% of the energy produced to neighbouring Thailand, making it a lucrative source of income.

Laos, a landlocked and poverty-stricken country, has secured billions in foreign funds from hydropower investors.

But the country’s focus on the energy source has provoked a backlash from environmental activists, NGOs and scientists for its impact on the Mekong, one of the world’s longest, largest and resource-rich rivers. A report from the inter-governmental Mekong River Commission in April estimated its fish stocks would fall by up to 40% as a result of the hydropower projects.

A report by the Stockholm Environment Institute also pointed out that “changes in rainfall and extreme weather could pose a risk to Laos’ hydropower-dominated electricity system”.

Last year, a dam broke along Laos’ Nam Ao River, unleashing a torrent of water that flooded seven villages and ruined acres of farmland.

But concerns over hydropower dams have been dismissed by the government.