Lao PDR Tunnel Project Receives MCDF Early Project Preparation Grant Support Under AIIB-ASEAN Program

Early project preparation (pre-concept paper) grant support for the National Road (NR) 22 Tunnel Project in Lao PDR was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee (GC) during its virtual meeting administered from Beijing on 26 March.

The project aims to enhance road connectivity in Lao PDR and neighboring countries critical to regional supply chain growth and sustainable development, 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 third approved grant under this provision.

The technical assistance will support the identification and project concept development of tunnel construction and enhancement, particularly along NR 22 in Lao PDR, in line with International Financial Institution standards.

The project will help pave the way for significantly faster, lower carbon, and disaster-resilient travel between the capital, Vientiane, and Luang Prabang, as well as stronger regional connectivity between landlocked Lao PDR, Thailand, and China.

The MCDF grant will support the collection of road network data as well as topographic, geological, and environmental information.

Other activities to be funded by the grant include the identification of a candidate list of tunnel alternatives and preparation of a pre-feasibility study report. It will also seek to help identify potential co-financiers.