The European Investment Bank (EIB) has formally agreed on new support to improve 1,400km of roads in six provinces in rural Lao PDR that are currently unpaved.
The support will help more than 1.6 million people living in the provinces of Phongsaly, Houaphan, Oudomxay, Xiengkhouang Xayabouly and Bolikhamsay benefit from quicker travel, as average speeds on the roads are expected to double.
EIB director general Luca Lazzaroli signed a €5m grant agreement with Dr Kikeo Chanthaboury on behalf of Government of the Lao PDR, which will help enable parts of the national road network to be paved, elevated and stabilised.
This amount will be used alongside the EIB’s €20m loan for the Lao Resilient Rural Roads project.
Upon completion, the upgrade work will better protect rural roads from flooding, storms and drought across Laos.
EIB vice-president responsible for lending operations in South East Asia Andrew McDowell said: “Rural communities in Laos are amongst the most vulnerable anywhere in the world to extreme weather.
“This project will be a model for Lao PDR and the rest of the world. This project is only possible following the professional cooperation of Laos, European Union, Nordic Development Fund and World Bank partners involved.”
The European Union Delegation to Lao PDR head Léon Paul Faber said that the combination of financial strength and technical experience of the EIB with support from the European Union and other partners will provide a better impact of the project.
The rural road upgrading scheme is expected to be completed by 2021.
As part of the road improvements, new safety measures, including better signs, dedicated footpaths, marked pedestrian crossings and lighting will be introduced.
Local contractors will be engaged for construction of the new €60m rural road project, which follows the implementation of the first World Bank Lao Road Sector Project.