ADB approves USD 48 mln to improve environmental services in Lao PDR

The Fourth GMS Corridor Towns Development Project for the Lao PDR will pilot test the first decentralized wastewater system in the country.

The Asian Development Bank’s (ADB) Board of Directors has approved a $48 million grant to help improve urban environmental services and enhance economic connectivity in Paksan and Thakhek, two of the least developed towns along the Greater Mekong Subregion (GMS) Central Corridor in the Lao People’s Democratic Republic (Lao PDR).

“Developing corridor towns is central to Lao PDR’s economic growth and development as the country shares borders with all GMS countries,” said ADB Principal Urban Development Specialist for Southeast Asia Mr. Satoshi Ishii. “The project will help enhance the economic potential of Paksan and Thakhek through improved urban services and help capture the increasing regional trade and investment in the area.”

Along with the Mekong River, the 1,600-kilometer (km) GMS Central Corridor—which includes 13 towns in the Lao PDR and Cambodia with about 20 million residents and serves as the backbone of the Lao PDR—has the potential to generate more than $20 billion in regional economic output.

However, these corridor towns face growth constraints. In Pakxan, only 12% of households have properly constructed and managed septic tanks and less than a half of households are being served by municipal solid waste service. In Thakhek, similarly, only 20% of the households have septic tanks for sanitation, and less than 60% are served by a functioning solid waste collection system.

The Fourth GMS Corridor Towns Development Project for the Lao PDR will pilot test the first decentralized wastewater system in the country. It will finance eight small-scale water treatment plants and a total of 27 km of new sewerage networks, which will treat 1,700 cubic meters of sewer per day in the two corridor towns. It will also help the town governments build controlled landfills with a total combined capacity of 520,000 cubic meters to improve waste collection and management, as well as 32 km of drainage networks and 6,070 meters of river embankments for flood protection.

The project will also rehabilitate the old town center at Thakhek to promote regional tourism and prepare urban development master plans with climate-resilience and gender-responsive measures for both areas to support growth and regional connectivity.

The total cost of the project is $54.06 million, with the Government of the Lao PDR contributing $6.06 million. It is expected to be completed by the end of 2023.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in co-financing.