Additional financing of US$ 21 million for Lao Road Sector Project signed today at Ministry of Finance
Vientiane, August 8, 2012 – The World Bank and the Government of Lao PDR signed today the financing agreement for an additional grant of US$21 million for the Lao Road Sector Project. The agreement was signed by H.E Mr. Santiphab Phomvihane, Vice Minister of Finance, for Lao PDR and Ms. Keiko Miwa, Country Manager, for the World Bank to Lao PDR. The main objectives of this project are to improve road services on National Roads 1B and 6A in Phongsaly and Huaphan provinces respectively, to support maintenance works on critical sections of the provincial road network, and to establish a contingency fund for rapid disaster response. The additional grant builds on good progress in the implementation of the original grant of US$27.8 million, which was approved in 2010.
The additional grant will finance features that reinforce the disaster resilience of the above-mentioned roads, such as slope stabilization, drainage systems, water crossing structures, and surface treatment. Additional financing will also be used to construct a bridge over the Nam Ma River connecting two sections of National Road 6A. The works are co-financed with funds from the National Budget and the Road Maintenance Fund.
While a large part of the additional grant finances civil works, institutional aspects have also been considered. Institutional strengthening activities include the development of sector capacities for the management of innovative financing mechanisms, such as Public Private Partnerships, expansion of the e-governance platform developed under the original project, and further strengthening the internal control environment in order to promote efficiency. The additional financing will also boost activities that support fiduciary, environmental and social safeguard management capacities at central and provincial levels.
In addition, as traffic volumes are rapidly increasing on both, urban and national roads, the grant will complement the provision of road safety furniture with awareness-raising campaigns on traffic safety, accident prevention, safety rules enforcement, and quality assurance of driving schools.
The grant will also be used for topping-up the emergency contingency fund, which was depleted following Typhoons Haima and Nok Ten in 2011.
The Lao Road Sector Project is an important part of the Lao PDR Country Partnership Strategy (CPS), endorsed by the World Bank Board in March 2012, which aims to improve connectivity of the country by a robust program of road improvement and eventual expansion with new investments in provincial infrastructure.