(KPL) The Lao Government and the Asian Development Bank (ADB) signed a set of financing agreements for the Sustainable Agrifood Systems Sector Project in Vientiane today.

The agreements were signed in Vientiane by Mr. Soulivath Souvannachoumkham, Deputy Minister of Finance, representing the Lao PDR government, and Ms. Shanny Campbell, ADB Country Director for the Lao PDR. The signing ceremony was attended by senior officials from various government agencies, along with the Ambassador of the European Union to the Lao PDR.

 “The project supports the Lao PDR Government’s efforts to accelerate agriculture sector growth and deliver benefits to households and agribusinesses,” said Mr. Soulivath. “On behalf of the Government of the Lao PDR, I would like to thank our development partners, particularly ADB and the European Union, for their continued support”. 

The project, with the agreements signed today, will be supported by a USD 50 million package from ADB, the ASEAN Infrastructure Fund, and the European Union-ASEAN Catalytic Green Finance Facility, along with USD13 million in grants from the Asian Development Fund and the Green Climate Fund through the Community Resilience Partnership Program Investment Fund. The project will be implemented by Ministry of Industry and Commerce supported by the Bank of the Lao PDR, the Ministry of Agriculture and Environment, and the Lao National Chamber of Commerce and Industry.

The project will improve climate resilience, food security, nutrition, and household incomes in Lao PDR. It will also strengthen agrifood systems geared toward domestic and export markets for high-value commodities. Investments in commercial financing, privatized technical services, small-scale infrastructure, and food safety will be provided in support of these objectives.

Financial services will be offered through banks and microfinance institutions nationwide, while technical advisory services and infrastructure will be delivered in Champasak, Salavan, and Xekong provinces in the south and Houaphan, Phongsali, and Xaignabouli provinces in the north. Strategic high value commodities, such as bamboo, coffee, durian, sustainable cassava, and tea, will receive additional support to increase value addition prior to export.

“By supporting national efforts for agrifood systems transformation, the project will benefit communities and enterprises while also contributing to the country’s economic growth,” said Ms. Campbell. “This project is an integral element of ADB’s broader country program in support of the Government’s social and economic development agenda”.

The Lao PDR’s agriculture sector holds significant growth potential, spurred by rising domestic and regional demand. However, unlocking this potential requires improving the competitiveness and resilience of agrifood systems, boosting food security and nutrition, and increasing exports of high-value commodities.

KPL