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Lao PDR to strengthen climate-resilient road network and connectivity

08.02.2017

Lao PDR, NDF and World Bank signed financing agreements for a climate-resilient road network project on 7 February.

The Lao PDR Ministry of Finance signed financing agreements with NDF and the World Bank for the Lao Road Sector Project 2 (LRSP2) on 7 February. The project aims to improve climate-resilient road maintenance in a time of increasing impacts related to climate change. With that aim in mind, the project will build capacity and improve planning systems and contract management among relevant authorities and contractors.

LRSP2 will support road maintenance work in six poor provinces that are highly vulnerable to flash floods, landslides and other natural disasters - Phongsaly, Houaphan, Oudomxay, Xiengkhouang, Xayabouly and Bolikhamxay, thereby providing year-round access to basic services, schools, and markets for around 1.6 million people. Lao PDR is highly vulnerable to floods, droughts and storms with local transport infrastructure particularly exposed due to the climate-related increase in the frequency and intensity of natural disasters.

NDF will provide a EUR 6 million loan coupled with a EUR 5 million grant, and the World Bank will extend a loan of USD 25 million. The NDF grant funding will finance two consultancy contracts, and the loan funding is planned to go towards civil works for climate-resilient periodic maintenance.

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The general program objectives to which NDF funding will contribute are: (i) improved climate-resilient road connectivity in selected provinces; and (ii) strengthened climate-resilient and efficient road asset management practices at national and provincial levels.