Rapid urbanization, population growth, and increasing consumption in Lao PDR have resulted in critical challenges faced by cities. In cities, car ownership is growing and emissions from waste, construction, and electricity consumption (electricity supply is approx. 20% coal, 80% hydro) are all on the rise. In addition to increased GHG emissions from cities, they are also at risk from the impacts of climate change. Lao’s 5 biggest cities (Vientiane, Pakse, Thakhek, Kaisone and Luang Prabang) are all located along the Mekong River in the flood plains. These cities face risks from extreme weather events putting their infrastructure at risk along with the well-being of the residents and profits of local businesses. 

Coordination across different stakeholders involved in green and resilient urban development is not functioning well. In addition, integrating climate change into urban development is still lacking and so is private sector engagement in this space. 

This project directly enhances Lao PDR’s readiness to access climate finance for implementing its priority projects/programs in the areas of Green, Climate Resilient Cities. It supports the development of pipeline project/programs targeting to solve growing urbanization issues faced by cities, such as sanitation, solid waste management, decentralized wastewater management, transport, energy efficiency and resilience that have the potential to unlock climate financing at scale. The development of these projects will be informed by the experiences of other projects, programs and agencies in Lao PDR. 

The project objective is to i.) Improve coordination amongst key stakeholders in urban development and capacity to manage green, climate resilient cities ii.) Identify priority projects/programs on Green, Climate Resilient Cities iii.) Identify financing options to implement the identified priority projects and mobilize the private sector to contribute to Lao PDR’s country priorities iv.) Enhance private sector’s capacity to engage in Lao PDR’s priority program areas. This project is aligned with IO1. Strengthened national, sub-national and local green growth planning, financing and institutional frameworks and IO2. Increased green growth investment flows which enable partner governments to implement green growth policies.

Impact: Lao PDR is able to implement green, climate resilient urban development policy measures and investments to build livable cities that provide equitable economic opportunities for men and women. 

Outcome: N/A 

Project Outputs completed in 2019: 

i. Green Growth Policies:N/A

ii. Green Investments: 

• Investment proposal: 4 GCF concept notes were prepared and a study to assess low-carbon vehicle options instead of 100 diesel buses for the Vientiane BRT was completed. It showed electric buses to be the best low-carbon vehicle option in the Lao context with an IRR of 30% for the additional costs of electric buses and associated infrastructure. The Government of the Lao PDR took up this result and asked the project team for the VSUTP to incorporate electric buses into the subsequent design work of the BRT. 
• Advisory outputs that aim to create enabling environment: an assessment of institutional and technical gaps on green and climate resilient cities and an assessment of barriers and opportunities on private sector engagement in green growth and climate change were completed.  

iii. Capacity Building and Knowledge Products: 

• Total of 8 Capacity building activities were completed in the form of workshops to i.) Improve coordination amongst key stakeholders in urban development and capacity to manage green, climate resilient cities; ii.) Identify climate change challenges faced by cities and opportunities including priority projects/programs on Green, Climate Resilient Cities; iii.) Identify financing options to implement the identified priority projects and mobilize the private sector to contribute to Lao PDR’s country priorities; and iv) enhance private sector’s capacity to engage in Lao PDR’s priority program areas.

Project Manager: Annaka Marie Peterson 

Hyo Youl Kim, Bounma Thor, Jason Lee, Julie Robles, Phonesavanh Latmany, Souktaly Vannavongsy, Sengvida Manichanh