ADB is providing $300,000 and the Nordic Development Fund counterpart finance of $2.8 million equivalent for a technical assistance project to enhance the capacity of Lao PDR to cope with the impacts of climate change. The Government of Lao PDR will provide in-kind support of $300,000 for a total cost of $3.4 million.

The Southeast Asian country's high reliance on climate-sensitive sectors such as agriculture and water, weak institutional capacity, and limited resources to put adaptation measures in place, leave it vulnerable to extreme weather events, which are becoming more frequent. The government, with support from ADB, has prepared a national strategy and action plan on climate change but its ability to translate strategies into practice is hamstrung by human and institutional capacity constraints.

“Between 1966 and 2008 the country experienced about 30 flood events with one in 2008 causing a loss of $58 million alone, so strengthening climate resilience is central to the country's sustainable development and poverty reduction,” said Ancha Srinivasan, Senior Climate Change Specialist in ADB's Southeast Asia Department.

The grants will be used to build up technical skills and provide policy support for eight working groups of the National Steering Committee on Climate Change, responsible for implementing the country's climate change action plan. Assistance will be given to raise public awareness and knowledge about climate change, and for pilot adaptation activities in the water, agriculture and forestry sectors, which could potentially be replicated on a larger scale in future.

The project is supported at the highest levels of the Government of Lao PDR and will complement and strengthen links to other ADB activities in the country, such as sustainable natural resource management and rural infrastructure development projects. It will also assess the financing and investment flows required to address climate change in the water, agriculture and energy sectors.

The Lao PDR's Water Resources and Environment Agency is the executing agency for the project which will be carried out over 30 months, ending in September 2012. ADB's grant is from its Technical Assistance Special Fund, and it will administer the Nordic Development Fund's contribution. The Nordic Development Fund, jointly owned by Denmark, Finland, Iceland, Norway and Sweden, provides grant financing for climate change interventions in low-income developing countries, with a particular focus on Lao PDR, Cambodia, Viet Nam and Mongolia.