Lao People's Democratic Republic


Natural Hazard Risk

Lao People’s Democratic Republic (PDR) is exposed to high climate and disaster risks. Droughts, floods, and storms are the most prevalent hazards, and are expected to become more severe with climate change. Three of the five costliest natural disasters have taken place since 2009, including two floods in 2013. The 2015–16 El Niño, one of the strongest on record, impacted the country through lower yields, reduced hydropower production, and storm damages.

These events have significant impacts on the agriculture sector, a critical part of the economy, representing about 24 percent of gross domestic product and 64 percent of employment. The poor have suffered the brunt of disaster consequences in the aftermath of disasters, due to their higher vulnerability and reduced ability to recover. About 80 percent of the Lao population practices subsistence agriculture and lives on less than $2.5 per day.

Government Priorities

Lao PDR has incorporated disaster risk management (DRM) in its policies and institutions. With support from GFDRR, the government integrated climate risks and measures in its main planning documents, including a scaled-up focus on DRM in the Eighth National Socio-Economic Development Plan (2016–20). Key sectoral policies and strategies in agriculture, environment, housing, and transport have integrated climate and disaster risk considerations.

The Ministry of Natural Resources and Environment introduced DRM and climate change in its Vision 2030, Strategy 2025, and Action Plan 2020––in consort with a 2010 National Strategy on Climate Change. In 2017, the Ministry of Planning and Investment, with World Bank support, decreed climate and disaster risk considerations in the public investment review process. A climate change and disaster management law is currently being developed, together with a new five-year National Strategic Disaster Risk Management Plan.

The government also developed disaster risk financing mechanisms. The State Reserve Fund, established in 2013 under the Ministry of Finance, includes 3 percent of the annual expenditure budget. The Social Welfare Fund, established in 2015 under the Ministry of Social Welfare, covers disaster emergency relief.

To further advance its DRM agenda, government priorities include:

  • Advancing legal frameworks to support DRM;
  • Strengthening the disaster and climate resilience of the transport sector; and,
  • Strengthening government capacity to respond to natural disaster events.
GFDRR progress to date

GFDRR has supported disaster risk management activities in Lao PDR since 2008. Following Typhoons Ketsana in 2009 and Haima in 2011, GFDRR supported damage and loss assessments that estimated losses at over $58 million and $63 million, respectively. The assessments helped leverage post-disaster funding from the government and donors and laid the groundwork for risk reduction activities. GFDRR helped rehabilitate damaged infrastructure and strengthened the government’s capacity to carry out future post-disaster assessments through trainings and developing a handbook.

GFDRR support has helped strengthen the legal framework for hydro-meteorological services and formulate a national strategy and standard operating procedures for early warning. Provincial and national risk profiles and a value for money strategy in reconstruction were also developed. With GFDRR assistance, DRM has been integrated in a urban development law and socioeconomic development plans at the national level and in the three provinces affected by Typhoon Ketsana.

GFDRR support is enabling improved disaster risk financial resilience in Lao PDR. Building on its 2012 report, “Advancing Disaster Risk Financing and Insurance in ASEAN Member States,” GFDRR crafted a feasibility study for risk financing and insurance options, enabling improved understanding of risk risk-informed decision-making. GFDRR has also supported a proposed Southeast Asia Disaster Resilience Insurance Facility for Cambodia, Lao PDR, and Myanmar. This would be the first regional catastrophe risk pool in Asia, building on similar GFDRR-supported initiatives in the Caribbean and in the Pacific.

Additionally, GFDRR support is helping the government develop DRM investment plans. This includes an integrated urban flood risk management plan for Muang Xay and major transport hubs in northern Laos and the capital city of Oudomxay Province. These efforts support preparing World Bank’s $30 million Lao PDR Southeast Asia Disaster Risk Management Project. GFDRR is also helping to improve the disaster and climate resilience of Lao PDR’s transport sector, with critical sections of selected provincial and district roads identified for interventions. These activities feed into a World Bank $25 million Lao road connectivity project.

GFDRR anticipates continued demand from the Government of Lao PDR to support:

  • Promoting an integrated urban flood risk management;
  • Strengthening the disaster and climate resilience of the transport sector;
  • Strengthening disaster financial resilience; and,
  • Enhance government capacity for DRM.

World Bank Engagements 2012 – Present

Project Description
Khammouane Development - Additional Financing Project
$8.6 million | Start date: 01/2012 (Closed)

The objective of the Additional Financing for the Khammouane Development Project is to strengthen the planning process and public financial management associated with decentralized delivery of services and infrastructure, including irrigation development in Khammouane Province.

Mekong Integrated Water Resources Management Project
$26 million | Start date: 03/2012 (Ongoing)

The program development objective is to establish key examples of integrated water resource management practices in the LMB at the regional, national, and sub-national levels, thus contributing to more sustainable river basin development in the Lower Mekong

Road Sector Project Additional Financing
$21 million | Start date: 07/2012 (Closed)

The project development objective is to improve road services on two main national corridors and the provincial road network, to rehabilitate the roads damaged by Typhoon Ketsana, and to establish and operationalize a contingency fund for quick disaster response in the road sector.

Lao PDR Customs and Trade Facilitation Project - Additional Financing
$6.5 million | Start date: 05/2013 (Closed)

The project development objective is to facilitate trade by improving the efficiency and effectiveness of customs administration and simplifying customs procedures to eliminate duplication and redundancy, reduce transactions costs and time to clear goods, and increase transparency and accountability.

Lao PDR: Building Resilience to Natural Disasters
$0.9 million | Start date: 06/2013 (Closed)

The development objective is to improve the capacity of the Government of Lao PDR to prepare for and respond to natural disasters by strengthening the legal frameworks for hydro-meteorological services, enhancing the efficiency of recovery planning, and developing options to reduce the fiscal exposure to natural hazards.

Lao PDR - Mainstreaming Disaster and Climate Risk Management into Investment Decisions
$2.77 million | Start date: 04/2011 (Closed)

The program aims to strengthen the institutional authority and implementation capacity of the Government of Lao PDR at national and sub-national levels to mainstreaming disaster risk management and climate change adaptation into public infrastructure investments, thereby potentially decreasing the vulnerability of the population and national economy to climate change and natural hazards.

Power Grid Improvement Project
$30 million | Start date: 06/2015 (Ongoing)

The project development objective is to help improve efficiency and reliability of power distribution in the selected load areas served by EDL.

Lao Road Sector Project 2 (LRSP2)
$25 million | Start date: 12/2016 (Ongoing)

The Project Development Objective is to strengthen maintenance systems to improve reliable road connectivity in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency.

Pacific Resilience Project II under the Pacific Resilience Program
$19.63 million | Start date: 05/2017 (Ongoing)

The objective of the Second Phase of Pacific Resilience Projects in the Republic of the Marshall Islands (RMI) is to strengthen early warning systems, climate resilient investments in shoreline protection, and to provide immediate and effective response to an eligible crisis or emergency.

Green Resilient Growth DPF
$38.5 million | Start date: 05/2017 (Closed)

The program development objective of the proposed DPF series is to support the Government of Lao's reforms enabling green resilient growth.

Additional Financing for Mekong Integrated Water Resources Management (Lao PDR)
$25 million | Start date: 07/2017 (Ongoing)

The development objective of First Phase of Mekong Integrated Water Resources Management Project of Lao People’s Democratic Republic is to improve water resource and fisheries management in selected areas of the Lower Mekong Basin.

Lao PDR Southeast Asia Disaster Risk Management Project
$30 million | Start date: 07/2017 (Ongoing)

The objective of the Southeast Asia Disaster Risk Management Project for Laos is to reduce the impacts of flooding in Muang Xay and enhance the Government’s capacity to provide hydro-meteorological services and disaster response.

Agriculture Competitiveness Project
$25 million | Start date: 04/2018 (Ongoing)

The development objective of Agriculture Competitiveness Project for Lao People's Democratic Republic is to increase the competitiveness of selected agricultural value chains in the project areas.

Lao National Road 13 Improvement and Maintenance
$40 million | Start date: 05/2018 (Ongoing)

The development objective of National Road 13 Improvement and Maintenance Project for Lao People's Democratic Republic is to improve the road condition, safety and climate resilience on critical sections of National Road 13.