Laos

In Laos, roads, tracks and bridges in rural areas are often in a bad state of repair. This means that many villages, especially in the country's mountainous regions, are literally cut off for six months each year during the extensive rainy period and some are without any transport connections. Poverty remains widespread, as the affected regions are barely able to harness their economic potential. KfW is supporting Laos's rural regions in extending and repairing roads, tracks and bridges. The approx. 150,000 people living there can now reach their markets, schools, health care centres and other important facilities all year round, quickly and safely on the 1,000 kilometres of roads which were financed. New regional mobility increases the income of households, contributes to mitigating poverty and allows children and youth, particularly girls, to attend school.

A further part of the focal area of KfW's work on behalf of the German government is tackling the country's increasing deforestation, thereby conserving biodiversity. Today 42 % of Laos is covered in forest, and is consequently the second most heavily forested country in Southeast Asia after Myanmar. Villages in the project area protect the valuable CO2 sinks in the forest of their regions, and also the climate, by signing working contracts for protecting the forests and receiving compensation payments.

Project example - Road construction  (PDF, 483 KB, non-accessible)

An economy cannot develop sustainably without a qualified workforce. To stem the influx of craftsmen from the neighbouring countries of Thailand, Vietnam or China, the German government is supporting Laos in setting up and expanding vocational training centres for craftsmen. Financial cooperation and technical cooperation are both active on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) in Laos. KfW finances the construction and expansion of hostels, workshops and schools, and the purchasing of teaching aids and machines. The German Gesellschaft für Internationale Zusammenarbeit (GIZ) supports Laos in training teachers and drawing up training plans. A study by the Laotian Ministry of Education showed that 85 % of qualified vocational pupils open their own workshop or business ‒ 40 % of these entrepreneurs are female.

A further focus of KfW's commitment to supporting micro, small and medium-sized enterprises (MSMEs) is expanding the Laotian financial system. To date, the banking sector has not enjoyed much trust among the population and hardly offers any products and services for this target group. On behalf of the German government, KfW is therefore providing the ACLEDA Bank Lao with a non-repayable financial contribution for a revolving micro-finance fund. The ACLEDA Bank Laos can thus extend loans at favourable conditions to poor households and MSMEs, and in doing so finance their business activities. As part of the financial sector development programme, a training measure for the Bank of Lao and other partner banks will be developed. Over the medium term, an independent institution is to evolve for financing the business activities of disadvantaged households and MSMEs. The platform will be based on loan repayments which are then passed on to new customers.

Project example - Vocational Education