Vice Minister of Finance Thipphakone Chanthavongsa, right, shakes hands
with World Bank Country Director for Southeast Asia, Mr Ulrich Zachau, Vientiane, Feb 7, 2017

(KPL) The Ministry of Finance and the World Bank have signed a US$25 million agreement to further strengthen road maintenance systems and improve road connectivity throughout the country.

The agreement was signed in Vientiane Capital on Feb 7 between Vice Minister of Finance, Mrs Thipphakone Chanthavongsa and the World Bank Country Director for Southeast Asia, Mr Ulrich Zachau.

The new Lao PDR Road Sector II Project is part of the country's national program to build climate resilient roads and infrastructure.

 “Our partnership with the World Bank on road maintenance has resulted in better and safer roads.  With this new agreement, people in rural areas will benefit from more reliable roads throughout the year, said Dr. Bounchanh Sinthavong, Minister of Public Works and Transport.

The Road Sector II Project will support road maintenance work in six poor provinces that are highly vulnerable to flash floods, landslides, and other natural disasters - Phongsaly, Huaphan, Oudomxay, Xieng Khuang, Xayaboury and Bolikhamxay.  

This will provide year-round access to basic services, schools, and markets for around 1.6 million people.

 Lao PDR is one of the ASEAN countries most 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.

“The World Bank is pleased to continue supporting Lao PDR in building stronger, safer, weather and climate change resilient roads," said Ulrich Zachau, World Bank Country Director for Southeast Asia. “Better roads will help prevent disaster-related road closures, ensuring better connectivity and access to income opportunities and basic social services.”

The new financing was approved by the World Bank's Board of Executive Directors last month, and comes from the International Development Association, the World Bank's fund for developing nations. The program is also supported by funds from the Government of Lao PDR and the Nordic Development Fund.

In addition, the European Investment Bank has expressed interest in providing finance.  The World Bank has been supporting roads in Lao PDR since the 1990s.

KPL