ADB supports Laos to address climate risks, improve livelihoods

The Asian Development Bank (ADB) has approved a US$32-million financing package to support Laos in strengthening its response to climate change and improving the livelihoods of agricultural communities in Vientiane and the central provinces of Borikhamxay and Khammuan.

The Flood and Drought Mitigation and Management Sector Project will help the Lao government to reduce financial and economic losses from floods and droughts. --Photo ADB

The Flood and Drought Mitigation and Management Sector Project will help the Lao government in its efforts to reduce financial and economic losses from floods and droughts and enhance dietary diversity.
According to the ADB, the project aims to promote economic diversification through the expansion of high value crops, creation of jobs to absorb the surplus agricultural workforce, improvement of the business enabling environment, and generation of foreign exchange and domestic tax revenues by expanding agricultural exports.
“Financing for the project will consist of a US$30 million concessional loan by ADB to the Lao government, along with a US$1.5 million grant from the Asian Development Fund, which provides grants to ADB’s poorest and most vulnerable developing member countries, to strengthen community flood preparedness, and a US$500,000 grant from the High-Level Technology (HLT) Fund to support modernisation of the country’s agrometeorological information system,” the ADB said.
“High food price inflation and losses to agricultural yields from floods and droughts affect households’ food consumption, income, and welfare,” said the ADB Country Director for Laos, Sonomi Tanaka.
“This project will target our support at boosting climate resilience and improving the livelihoods of agricultural communities. It will introduce low-cost innovations to harness floodwaters and increase the reliability of water availability during droughts, enabling the production of diversified crops, including marketable higher valued ones, all year round.”
According to the ADB, Laos is highly vulnerable to extreme weather events, including floods and droughts, which are estimated to reduce the country’s gross domestic product by up to 2 percent annually.
Extreme heat is leading to increasingly lower rice yields in the dry season due to declining water availability, higher crop water requirements and poor soil health. In response, the project will incorporate measures that include financing the construction of irrigation schemes that supply the right amount of water to the right place at the right time.
Just last week, the ADB approved a US$35 million concessional loan and a US$10 million grant for the Urban Environment Improvement Investment Project to help support sustainable, inclusive and resilient urban development in Luang Prabang city.
The Asian Development Fund (ADF) provides grants to ADB’s poorest and most vulnerable developing member countries (DMCs). Established in 1974, the ADF initially provided loans on concessional terms. Grants were introduced in 2005, and beginning in 2017, with ADB’s concessional lending financed from its ordinary capital resources, the ADF has become a grant-only facility.

By Times Reporters
 (Latest Update December 13, 2023)