NDF - Financing for climate change and development projects

NDF to co-finance improvements to Lao PDR’s most important road

Photo: Erik Holmqvist/NDF
11.10.2018

The project will showcase best-practice climate-resilient road infrastructure for the most heavily trafficked road section in Lao PDR.

NDF has approved EUR 8.0 million in concessional credit to join the World Bank and the Asian Infrastructure Investment Bank in financing the Lao PDR - National Road 13 North - Climate Resilient Upgrade and Maintenance project. This project will finance the upgrade and maintenance of 58 km of climate-resilient road from northern Vientiane to Phonhong. Today the road on this most heavily trafficked road section in Lao PDR is two-lane asphalt with low climate resilience, lacking road safety infrastructure and with sections of heavy congestion at peak travel times.

Lao PDR is a landlocked country heavily dependent on road transport for its economy; both in terms of imports and exports, and as a trade hub between China, Thailand and Vietnam. With its seasonal weather which includes dry, wet and flood seasons, the country’s infrastructure is often put under severe strain. Roads are affected by, among other things, flash floods, back floods, extended dry and hot periods, and landslides. This limits people’s access to crucial services such as health care, education, and markets, which in turn negatively impacts economic growth and social development. Women and girls are often particularly affected by, for example, the lack of access to health care, child care services and education given the more limited options that still exist for women in Lao PDR.

NDF continues to work with the World Bank and AIIB on appropriate gender equality activities and indicators. The activities and indicator on pedestrian access is related directly to gender impact as a study has shown that the vast majority of female road users are pedestrians, and activities are being put in place to directly benefit those women.

This project builds on the openly demonstrated proactive approach of Lao PDR in the climate change area. It is a direct response to identified needs and priorities. The project also builds on NDF’s extensive experience from road and other transport projects globally, where NDF has been at the forefront of climate-resilient infrastructure in cooperation with its financing partners.

Through this project, best-standard climate resilience planning, design, works and maintenance will also be tested on the most heavily trafficked and economically most important national road in the country. The project will also pilot Output and Performance Based Road Contracts (OPBRC) with greater involvement of the private sector, as well as lending for climate resilience technical assistance.

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