ADB unveils new financial support for Laos
VIENTIANE (Vientiane Times/ANN) - The Asian Development Bank (ADB) has launched a new business plan which includes funding arrangements to support development in Laos over the next few years.
According to the ADB Country Operations Business Plan for 2020-2022, the Manila-based international financial institution has indicative concessional loans of US$322 million available for Laos to finance development projects from now until 2022.
Speaking to Vientiane Times this week, an official at the ADB Laos Office explained that this loan was available for Laos but the amount of money actually loaned would depend on several factors, including the government’s willingness to borrow money.
He added that the amount borrowed and lent would also depend on the funds that could be mobilised from various sources, and that the total amount lent could be more than this.
The key areas ADB is keen to finance include infrastructure and private sector development to support employment and income, enhanced human resource development, and sustainable natural resource management and climate resilience.
Gender equity and governance are crosscutting themes, according to the plan, which is posted on the Bank’s website.
In addition, the ADB’s business plan for Laos will focus on inclusive and sustainable development in line with the operational priorities of ADB’s Strategy 2030. This aims to make Lao cities more livable by easing infrastructure constraints and providing urban services.
The ADB also wants to finance the improvement of human capital to reduce inequality in access to opportunities, together with the creation of quality jobs, enhancing rural development and food security, and providing climate and disaster-resilient infrastructure.
Investment in these areas will mainstream activities to support gender equality, good governance, innovative knowledge solutions, and policy and institutional reforms.
These projects will also contribute to the attainment of several Sustainable Development Goals in Laos, the 2020-2022 ADB plan indicates.
Using the IMF as a reference, ADB’s business plan states that the sale of more electricity to neighbouring countries would help to accommodate the investment risk.
Government data indicates that a number of large-scale hydropower plants have begun commercial operation and generated income for Laos since the end of last year.
In addition, mega investment projects such as the under-construction expressway and the Laos-China railway, and the transformation of Laos from being landlocked to a land link, will further boost economic growth. This will create new investment and business opportunities for local and foreign businesses.
Academics say the challenge for Laos is to ensure that investment projects do not harm the environment. Environmental protection is viewed as a key factor in sustaining economic growth.