ADB increases development financing and resumes lending to Laos

The Asian Development Bank (ADB) announced last Friday that increased development financing will be made available from its concessional Asian Development Fund (ADF) resources for the period 2011-2012. At the same time, the ADB is resuming its lending operations to the Lao Government.

The ADB will make a total of $152.27 million from ADF available for 2011-2012, of which $84.6 million will be in the form of highly concessional loans and $67.7 million in grants.

This compares to an allocation of $115.28 million for 2009-2010, according to last Friday�s press release of ADB in Laos.

The increase in resources is due to improved performance of the Lao PDR in a number of key areas, including macroeconomic management, environmental management, gender, governance and portfolio management. In addition, in ADB�s judgment, the external debt situation has improved in recent years, allowing resumption of lending operations.

Utilisation of the increased allocation will be the subject of discussions between the Government and the ADB as part of the formulation of a new country partnership strategy (CPS) for 2012-2016.

�The increased resources allocation and the resumption of lending operations are a clear signal of our confidence in the future of the Lao PDR,� said Dr. Chong Chi Nai, Country Director of the ADB in Vientiane. �Our discussions with the Government will focus on how the increased allocation can be used effectively, so as to maximise development impact of ADB-financed projects,� he added.

The ADB is a key development partner for the Lao PDR. In 2010, the ADB approved 8 projects for a total of $151.60 million. As of end-2010, the Government had 30 ADB-financed projects under implementation, for a total of $446.90 million.