LAO PEOPLE'S DEMOCRATIC REPUBLIC
UNCDF has been present in Lao PDR since 1982, helping the government tackle its peace and development challenges. In particular, UNCDF has supported efforts to strengthen Public Financial Management, local government finance and administrative development and financial inclusion. Through this, Lao PDR has emerged as a fast-growing economy that is on the cusp of graduation from least developed country status.
Today, UNCDF works in partnership with the UN country system (UNCT) and development partners to offer “last mile” finance models that leave no one behind. Our financial solutions are designed to unlock domestic public and private resources to reduce poverty and support local economic development.
SMART Green ASEAN Cities Programme
The SMART Green ASEAN Cities programme, with funding support from the European Union, works towards the development of environmentally sustainable cities in Southeast Asia - a priority for ASEAN. UNCDF has partnered with the Environment Division of the ASEAN Secretariat and provides its expertise to create innovative financing solutions that promote smart green city investments.
The programme will support ASEAN Member States on a city, national and regional level to deal with urban environment, climate change and related governance issues. Applying a mix of North-South and South-South policy dialogues and knowledge sharing, the project will help cities in Lao PDR develop masterplans based on smart solutions enabled by digitalization and the use of technology.
The support will also enable policies and access to public and private funds by facilitating South-South cooperation between cities within ASEAN, as well as among ASEAN and European cities. Together with the Ministry of Natural Resources and Environment, UNCDF has identified two cities in Lao PDR to be piloted under the programme.
UNCDF is implementing a new joint programme on behalf of UNCT in partnership with the United Nations Department of Economic and Social Affairs (UNDESA) and the United Nations Office for Project Services (UNOPS). With the Ministry of Home Affairs as the lead implementing partner, UNCDF supports the delivery of capacity-building to subnational administrations to register and better manage their assets. The intervention will help local governments better manage their annual budgets to assure the continuity of public services through improved maintenance and replacement procedures and processes.
Integrated National Financing Framework for SDGs
UNCDF is working with the United Nations Development Programme (UNDP) and United Nations Population Fund (UNFPA) on the Integrated National Financing Framework (INFF) for the Sustainable Development Goals (SDGs) in Lao PDR.
UNCDF has developed an SDG budget tagging methodology working directly with the Ministry of Finance. The programme is in the process of testing the devised budget tagging system to improve SDG reporting through an approximation of revenues and expenditures allocated to the SDGs.
Public Finance Management
UNCDF, through the efforts funded by the SDG Fund, is working with development partners including the International Monetary Fund (IMF) and World Bank to support the Ministry of Finance update the national Chart of Accounts to the International Public Sector Accounting Standards (IPSAS).
In addition, UNCDF is engaging with the Public Debt Management Division to set up internal systems for more effective management of the Lao PDR sovereign rating. This activity is part of a wider regional initiative that will bring together the governments of Cambodia, Lao PDR and Thailand to exchange knowledge and technical solutions.
Lao PDR has successfully implemented high-value national investments through public-private partnerships (PPPs), with the most recent being the completion of the highspeed train that connects Vientiane to Kunming, China. Today, the government is developing smaller scale investments that take advantage of this new connectivity.
Working in partnership with the Ministry of Planning and Investment, UNCDF is assisting the government to develop the PPP law and associated Standard Operating Procedures (SOPs). This will be done while simultaneously developing the national and subnational project bank that will contain a filtered set of infrastructure, service delivery, and climate-adaptive bankable projects intended for solicited and unsolicited PPPs.
Local Climate Adaptive Living Facility (LoCAL)
In Lao PDR, LoCAL was piloted under the District Development Fund – Climate Resilient Grants (DDF-CRG). The DDF-CRG allocated US$2 million to implement 29 small-scale rural water-infrastructure projects, including water supply, irrigation and wetland management and bridges and culverts, in 12 districts of two provinces in southern Lao PDR from 2014 to 2017.
DDF-CRG guidelines, endorsed by the Ministry of Natural Resources and Environment, helped integrate climate change adaptation measures into the existing and tested DDF mechanism, using LoCAL approaches.
The district administrations led the infrastructure development process taking a participatory and bottom-up approach, following the due diligence procedure of public expenditure management (PEM) of the DDF-CRG guidelines, instructions and manuals.
UNCDF supported Lao PDR in scoping and designing the LoCAL Lao PDR mechanism, an on-budget financing grant system that serves as the country’s financing mechanism for local climate action. Through this mechanism, Lao PDR can access and channel global climate change financing to support local adaptation efforts.
Digital and financial inclusioN
In Lao PDR, UNCDF helped build a digital finance ecosystem and delivered digital solutions to people with low incomes. Working with the government, UNCDF provided technical support to the Bank of Lao PDR advance the country's National Financial Inclusion Strategy, with specific support intended to advance women's economic empowerment.