Lao PDR Road Connectivity Receives MCDF Early Project Preparation Support Under AIIB-ASEAN Program

Early project preparation (pre-concept paper) support focused on identifying priority investments in southern Lao PDR for strengthening road connectivity and trade flows between the landlocked country and its regional neighbors was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee (GC) during its meeting in Beijing on 22 October.

The project will guide the selection of high-quality investments for the construction and enhancement of national roads within Lao PDR’s provinces of Attapeu, Champasak, Salavanh, and Xekong. It aims to promote the integration of these roads with transport networks in Cambodia, Thailand, Viet Nam, and beyond, in line with the 2025 Association of Southeast Asian Nations (ASEAN) Connectivity Master Plan.

The pre-concept paper support will be implemented under the Asian Infrastructure Investment Bank’s (AIIB) Joint 3-Year Program with ASEAN Supporting Infrastructure Connectivity in the ASEAN Region. The GC approved a USD2.69 million grant for the program in October 2022, including a provision for six early project preparation (pre-concept paper) support totaling USD900,000 (up to USD150,000 each).

The MCDF pre-concept support, with the total cost of USD157,500, is the fourth approved grant under this provision.

MCDF support will cover a diagnosis of southern Lao PDR’s current road network, priority road identification, a cost-benefit analysis and implementation plan, and a pre-feasibility study for prospective investment, in accordance with International Financial Institution standards.

These activities will lay the groundwork for potential investments by AIIB and partners to improve road conditions, safety, and climate resilience in key southern sections of Lao PDR’s national road network. Such enhancements could reduce travel time and transport costs in the area and help drive regional connectivity, trade, and sustainable development.

The MCDF pre-concept support complements rehabilitation and enhancement work under Lao PDR’s National Road 13 south extension project, which is being financed by AIIB and the Abu Dhabi Fund for Development and was provided project preparation support through a USD735,000 MCDF grant approved by the GC in 2022.