This project aims to accelerate corporate thematic bond issuance in Lao PDR to enhance sustainable finance. The project works closely with Lao Securities Commission Office (LSCO) and key stakeholders to address gaps in regulatory frameworks and market readiness for thematic bond issuance. Key activities include conducting a gap assessment, survey local institutional investors and assessing the capacity for potential issuers. Ultimately, the project seeks to lay the groundwork  for first corporate green bond issuance in Lao PDR, contributing to the country’s green growth and long-term climate resilience goals.

– Strengthen policy and regulatory frameworks to enable thematic bond issuance.

– Build capacity among investors, issuers, and stakeholders to enhance readiness and appetite for sustainable finance.

– Facilitate pilot thematic bond issuance to mobilize private capital for green growth initiative.

– Policy and regulatory enhancement – The project conducts a gap assessment to identify regulatory barriers and provide policy recommendations to strengthen the green finance framework.

– Capacity building – The project engages government officials, private sector, and issuers in training to enhance knowledge and readiness for green bond issuance.

– Issuance facilitation – The project supports a corporate entity in preparing for thematic bond issuance and obtaining a second-party opinion.

Lao PDR is facing substantial macroeconomic challenges due to the impact of the COVID-19 pandemic. Although the country’s GDP is projected to grow (with a 4.0% increase in 2024 and an expected 3.7% rise in 2025), it continues to face fiscal pressures, especially from a high public debt burden. These challenges, along with other economic risks, underscore the need for a transition to more sustainable financial practices, such as developing a green bond market.

Moreover, Lao PDR undergoes the following struggles in advancing its green and sustainable finance:

– Insufficient regulatory support – The lack of clear regulatory frameworks for green bonds, alongside an underdeveloped green finance taxonomy, hinders the growth of the green bond market.

– Low investor confidence – Investors are cautious, with limited interest in the bond market due to high risks and costs.

– Limited awareness and capacity – Issuers and investors have low levels of awareness and preparation for engaging in green finance.

– Lack of classification for green projects – The lack of green taxonomy, creates uncertainty in defining what qualities has a sustainable investment.

As a result, this project aims to address these challenges providing essential policy recommendations, building awareness, and facilitating the issuance of thematic bonds.

To promote a well-functioning corporate thematic bond market in Lao PDR, this project focuses on strengthening regulatory frameworks, building market capacity and facilitating pilot bond issuances.

– 1 gap assessment report issued: Identifying barriers and opportunities in green finance alongside with recommendations

– 1 report on institutional insight completed: Exploring market readiness for green bonds and investor appetite

– 45 experts trained: Capacity building for government, private sector, and issuers

– 1 private entity is supported through green bond issuance preparatory activities: A selected private entity is supported with Green Bond Framework, Second Party Opinion, and Financial Advisory

Read/download full project factsheet here: English version & Lao version