Press Release

Laos pursues road rehabilitation with US$6 million loan from OPEC Fund

45/2005 April 21, 2005, Vienna, Austria

The OPEC Fund for International Development today signed a US$6 million loan agreement with the Lao People’s Democratic Republic to help rehabilitate roads in four remote, rural provinces. The primary aim of the project is to facilitate socio-economic development by increasing access to reliable, affordable and safe year-round road transport.

Laos, a mountainous, landlocked, sparsely-populated country, is heavily dependent on road transport. However, only around 14% of the 32,600 km network is paved, with the remainder surfaced in earth or gravel. Agriculture is the main income-generating activity in rural areas, but the absence of all-weather roads makes the transport of produce slow and expensive. During the rainy season, many communities are cut off from reaching marketplaces and social services, further increasing poverty levels that are already high. Government has, thus, placed high priority on developing the country’s road infrastructure as a means of boosting food security, improving the livelihoods of small farmers and, ultimately, reducing rural poverty.

Works will be carried out in three phases in Laos’ Attapeu, Borikhamxai, Sayaburi and Vientiane provinces; areas experiencing the most acute economic isolation. Some 223 km of provincial and national roads will be reconstructed and upgraded to a gravel or paved surface, depending on the projected traffic levels and the present surface conditions. All of the roads targeted for rehabilitation have been accorded high priority as they either pass through or connect to one of the country’s 47 poorest districts

This is the 10 th loan the OPEC Fund has extended to Lao PDR. The other nine include one for balance of payments support, two for commodity imports programs and six project loans in the agriculture, energy and transportation sectors. In addition, the country is a participant in the Fund’s initiative against HIV/AIDS in Asia and the Pacific. A Fund grant was also used to finance Laos’ subscription to the Common Fund for Commodities.

Today’s agreement was signed in Vienna by H.E. Mr. Khouanta Phalivong, Ambassador Extraordinary and Plenipotentiary of Lao PDR to Germany, and by H.E. Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

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