Laos is a mountainous and landlocked country, but does have potential for its development. For the past ten years or so, it has had a high and stable growth rate, bolstered by substantial mining and hydropower resources, and is expected to come out of the category of Least Developed Countries about 2025. AFD mainly operates in the agriculture sector, rural development and the development of the cultural heritage.
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Statuettes, Laos
AFD and Laos: Supporting rural development and developing heritage
Statuettes, Laos

Supporting rural development

Coffee shoots Laos

Supporting rural and agricultural development

Over 65% of the population lives in rural areas, meaning the attention given in these areas to eradicate poverty is essential. AFD is a leading partner and combines support for public policies and actions in the field with capacity building for local actors. The objective: improve living conditions by increasing the quantity and quality of agricultural production, supporting sustainable agricultural practices and promoting access to the market.

Our action:

  • Support the agroecological transition by promoting practices, concerted local land use planning and the creation of networks of agroecological actors.
  • Assist local authorities in planning and building small-scale rural infrastructure. 
  • Strengthen value chains. In the field of coffee, AFD has been helping to build a high-quality sector on the Bolaven plateau since 1997. In 2019, AFD plans to invest in the tea sector since 2018. We also promote Geographical Indications: Little Chick Rice and Bolaven Coffee are currently in the certification process. 
  • Promote nutrition-sensitive agriculture. 
  • Develop agriculture, livestock raising and fishing for populations on the Nakai plateau, who have been displaced following the construction of the Nam Theun 2 dam. 
  • Link biodiversity and economic development. At regional level, AFD is supporting the NGO Wildlife Conservation Society (WCS) for the management of protected areas by local communities.

Preserving heritage

Ho Prabang, pagoda of the royal palace, Luang Prabang, Laos

Preserving heritage

Laos was for a long time left out of tourist routes. Yet the country has an enormous wealth of heritage. The number of tourists has risen from a few hundred in the 1990s to almost half a million visitors in 2016. This attraction is both an opportunity for local economic development and a potential threat to the preservation of sites and landscapes.

AFD ushers local authorities in their balanced management of sites listed by the UNESCO.

Since 1998, AFD has implemented operations to preserve the heritage of Luang Prabang, the former capital in Northern Laos.

Since 2012, AFD's support in this field has also been widened to the pre-Angkorian temple in Vat Phou, located in the Champasak district.

Supporting the NGO network

Rice paddy, Laos

Supporting the NGO network

The NGO network is very active in Laos. AFD is providing its financial support to seven of them for projects in various sectors: 

  • Aide Odontologique Internationale: improve oral health by distributing fluoridated salt. Build the capacities of dentists and practitioners. 
  • Handicap international: clear mines from the affected sites in order to reduce the number of victims of anti-personnel mines, sensitize Laotians to the risks of mines and provide assistance to victims.
  • GRET, which has been involved in the processing of Houaphan bamboo since 2010. This project aims to develop a national strategy for the processing of Houaphan bamboo and strengthen farmers’ organizations and the technical services which advise producers.
  • CCL: support rural communities living in the most remote areas in Phongsaly and Luang Namtha in order to improve their food security, with a focus on women and children; help diversify agricultural production and facilitate access to the market, while promoting environmentally friendly (or agroecological) practices in Oudomxay Province.
  • Tetraktys: involve and integrate communities in the ecotourism development of Kong Lor Cave in Khammouane Province. 
  • SFE: develop agricultural, health and hygiene activities on water, nutrition and education in Sekong Province.
  • AgriSud: build the capacities of communities in Viengkham District in Luang Prabang Province to combine production, management and natural resource protection. 

Our other activities

Vegetation, Laos

Our other activities

AFD also finances regional projects, working alongside:

  • The Mekong River Commission (Mekong River Commission), responsible for the dialogue between countries in the region for the management of the Mekong, whom 65 million inhabitants rely on.
  • Institut Pasteur in Laos and its first laboratory with European standards, as well as the ECOMORE 2 project, based on the emergence of illnesses related with climate change, especially dengue fever and leptospirosis. 

Finally, AFD supports the local economic activity via the ARIZ guarantee, a risk-sharing tool to encourage banks to lend to small and medium-sized enterprises and microfinance institutions. AFD is so far working with Banque Franco-Lao Bank (BFL) and ARIZ has facilitated some EUR 7m of loans to SMEs.

million euros committed since 1994
36 projects funded
start of AFD’s operations in Laos

Laos is today still classified among the least developed countries (LDCs). 

Its small population (6.7 million inhabitants), landlocked situation, mainly mountainous profile and turbulent history throughout the 20th century slowed down the country’s development up until ten years ago. 

Yet Laos does have assets: substantial mineral and hydropower resources, low agricultural production, but very distinctive farmland and a political will to stand out for product quality.

However, there are a number of challenges: reconcile development with natural resources protection, ensure the sustainable development of urban areas, and promote rural development for the 65% of the population who work in the agricultural sector.

With the exceptional growth rate of 7% for the past 10 years, Laos needs to stay the course for harmonious development. 

AFD has been operating in the country since 1994. It pays particular attention to rural populations and NGO networks, which are already active in the field.

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