Laos

In the rainy period many villages are literally cut off for six months each year 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. 165,000 people living there can now reach their markets, schools, health care centres and other important facilities all year round, quickly and safely on the 1,100 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. On behalf of the EU, KfW is also implementing a project for the improvement of water supply and nutrition security in rural areas in the provinces of Savannakhet and Khammuan.

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 58 per cent of Laos is covered in forest, and is consequently the second most heavily forested country in Southeast Asia after Myanmar. By settling land disputes, and villages in the project area obliging themselves to 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, the villages protect valuable CO2-storage in the forests of their region and thus also the climate.

Project information - Road construction  (PDF, 200 KB, non-accessible)

Project information - Village Forest Management Project  (PDF, 171 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, KfW is supporting Laos in setting up and expanding vocational training centres for craftsmen and to promote an even closer cooperation between vocational schools and the economy. Since 2011, nearly 48,000 students (thereof around 13,500 female) have attended vocational schools supported by FC.

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 especially in rural areas. On behalf of the German government, KfW is therefore providing the Bank of Lao with a non-repayable financial contribution for a revolving micro-finance fund. By these means, the Bank of Lao refinances local financial intermediaries, who provide investment credits to MSMEs, thus financing their expansion. This contributes to removing a bottleneck for investments and thus directly to the creation of jobs in rural areas.

Project information - Vocational Education  (PDF, 121 KB, non-accessible)