By Thavichanh Thiengthepvongsa Deputy Director General Investment Promotion Department Ministry of Planning and Investment

By Thavichanh Thiengthepvongsa Deputy Director General Investment Promotion Department Ministry of Planning and Investment

Outlines Lao Government Policy PPP Development Status Challenges Answers to Questions Some on-going projects Potentials

Country Snapshot Land Area : 236,800 sq. km Population :6.6 Millions Density: 25 p/km2 Population Growth: 2.3 % Labor Force: 2.9 Millions Religion: Buddhism Stable GDP Growth: 8%

2030 Vision: Green Growth MDGs: underline PPP 7 th NSEDP (2016-2020) GDP Growth: not less than 7.5%, Graduate from LDC by 2020 Diversify Economic Development Forms: Public: Law Public Investment, Law on Procurement, Private: Law on Investment Promotion, PPP is among other: Decree on PPP, Guidelines,

Page 5 1. Legislation Framework Development: PPP Decree 2. Pilot PPP Projects in 2 Social Sectors: Health and Education 3. Institutional Development and Capacity Building

Support implementation of PPPs in Lao PDR to realize national socio-economic objectives with efficient use of limited resources in transparent and sustainable manner. Create certainty, predictability and transparency in how PPPs will be implemented Provide specific provisions to support PPPs Based on international standards adapted to the Lao specific standards, situation and conditions

Scope of PPP : Sectoral coverage Payment: Revenue-based and availability-based Contracted and JV arrangements Government Responsible Authority Role of Executing Agencies Establishment of PPP Board use existing National Investment Committee (NIC) in beginning PPP Office in Investment Promotion Department, Ministry of Planning and Investment and in Key Line Agencies

PPP Type: Solicited, Unsolicited and Direct Negotiation Qualified PPP Candidates: Foreign and Domestic Private, SOE Subsidies: Guarantee, tax, non-financial subsidies Multiple -year Budgeting Project Development Facility

1. What are the sources of financing for PPP Projects: Government Budget Private Fund Loan: Domestic banks, Foreign banks, Multilateral and Bilateral banks, Exim Banks, ODA, Capital market 2. What are the obstacles for PPP financing by domestic banks: No particular finance for PPP yet, but in general size of fund, bank capability in dealing with complex and long term finance arrangement could be an obstacle. 3. Measures for facilitating for domestic financing of PPP projects allowed foreign banks to establish in Laos.

4. PPP Projects been financed through capital market: No specific system for PPP as such, but some SOEs: EDL Gen, BCEL, and some private investment are raising fund through capital mkt. 5. Has Government taken specific measures for facilitating of infrastructure projects through institutional investor: Credit enhancement mechanism (eg. credit guarantee fund), tax incentives (eg. Tax-exempt infrastructure bonds), regulation regarding the type of assets insurance companies and pension funds can invest in, rating of PPP projects by international agencies-lack of information. But there is Road Fund, in Power: Govt Guarantees Electricity Price to secure loan for SOE and sometimes for private investment, in land there are National Land Strategy and Land Law, IPL Land Use Rights. 6. Do you believe that capital markets financing of PPP projects can play significant role in your country? May be, but capital market is still premature in Laos, no prove yet.

Domitory of TVET Polytechnic College In Vientiane - be the First educational PPP project under ADB support/program for OBC and FS. Savanakhet University in Southern Part of Laos, costing 40 MUS$

World Class Vientiane Dry Port- Logistic Park Sponsored by JICA - Lao Government- Nippon Koei Lao-Thai Border Railway

Nam Theun 2 Hydro Electric Power Project the largest so far -1070 MW -Private Entity Govt. -25 years BOT

Road No. 13 North and South of Vientiane Capital Supported by World Bank and Lao Government Vientiane

Traffic on Road No. 13 N & S

ADB funds 290-MW hydro project in Laos The Asian Development Bank (ADB) has agreed to provide assistance totaling $217 million to support construction of the 290-MW Nam Ngiep 1 hydroelectric project on the Nam Ngiep River in Laos. Japanese construction company Obayashi last year won a contract to provide civil engineering works for Nam Ngiep 1 in Xaysomboun and Bolikhamxay provinces. The project is being developed by Nam Ngiep 1 Power Co. Ltd., which is jointly owned by Kansai Electric Power of Japan, Electricity Generating Authority of Thailand and Lao Holding State Enterprise. Source:https://aveasia.wordpress.com/2014/09/12/projec t-updates-adb-funds-290-mw-hydro-project-in-laos/

Infrastructures: Airport, Railway, Water Supply, Energy: Hydropower, Transmission Line, Renewable Energy, Service: Hotel, Commercial Centers, Recreation Parks Social Sector: Schools, Hospital Mining (?) SEZs Town Development Etc

Investment Promotion Department Ministry of Planning and Investment Souphanouvong Avenue, Vientiane 01001, Lao PDR Tel: (856-21) 216556 Fax: (856-21) 215 491, 214 035 Website:www.investlaos.gov.la Welcome to Laos Thank You Very Much For Your Attention!