Laos and World Bank Sign Agreement to Finance SMEs
Laos, August, 15 2014 -
The Government of Lao People’s Democratic Republic and the World Bank Group today signed two separate agreements worth up to USD$50 million.
The first agreement is aimed at making more credit available to small businesses in Laos through the Small and Medium Enterprise (SME) Access to Finance Project. The new support includes a USD$10 million grant, USD$10 million credit and USD$12 million in risk sharing funds. The project will provide long term credit to the small firms, with the view to helping them expand their job creation and productive activities.
“Financing for small firms is vital for the Lao economy. It will help to create more jobs and increase family incomes and revenues,” said Mr. Ulrich Zachau, Country Director for the World Bank to Southeast Asia.
The Government of Lao PDR and the World Bank Group also signed an agreement to support Lao PDR in the further development of the hydropower and mining sectors. Additional financing of USD$17.8 million for the Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Project. According to the World Bank, this project is meant to help improve the effectiveness of government institutions and build capacity in these sectors.
This financing builds on the achievements of the original grant of USD$8 million approved in 2010, and a grant of USD$2.54 million from the Australian Department of Foreign Affairs and Trade.
H.E. Mme. Thipphakone Chanthavongsa, Vice Minister of Finance of the Lao PDR commented, “The ceremony today reaffirms the commitment and cooperation between the Government of Lao PDR and the World Bank in supporting Government priorities as outlined in our National Socio-Economic Development Plan.
“SMEs, hydropower and mining sectors form an important part of the Lao economy,” he added.