Poverty Environment Initiative: Phase II

What is the project about?

 Economic growth in Lao PDR has largely been fueled by extractive industries such as logging in Khammouane Province. Photo: UNDP Lao PDR/ Stanislas Fradelizi

Since 2001, the Government of Lao PDR has relied heavily on natural resources to boost investment and economic growth in Lao PDR. As a result, investment from neighboring countries and other regions has focused on extractive industries, chiefly mining, hydropower and agro-forestry plantations.

This rapid investment in and growth of extractive industries requires careful management to safeguard Lao PDR’s interests while still promoting quality investment. The Government of Lao PDR has been working to promote quality investment under the framework and support of the United Nations Environment Program (UNEP) and the United Nations Development Programme (UNDP) Poverty Environment Initiative since 2009.  

Building on the design and success of the project’s first phase, 'PEI Phase II' aims to strengthen the capacity of the Government of Lao PDR to manage investment more systematically and increase the number of quality investments across the country. This begins with support to the process of selection of appropriate investors and consideration of the poverty-environment linkage through investment management and approval process. 

What have we accomplished so far?

  • Systematically incorporated social and environmental sustainability issues into 7th National Socio-Economic Development Plan.
  • Supported development of criteria for identifying green growth projects to promote better quality and environmentally sensitive investment.  
  • Strengthened institutional and staff capacities at the Investment Promotion Department and the Department of Environmental and Social Impact Assessment at central and provincial levels through provision of Poverty Environment Initiative investment and environmental management tools, South-South cooperation, training courses and on-the-job training. 
  • Developed Poverty Environment Initiative tools including: writing for environmental impact assessments, reviewing and monitoring guidelines, development of a ‘one-stop-service guidebook’ and a web-based investment compliance database.
  • Increased public involvement with the Department of Environment on Social Impact Assessments and Initial Environmental Examination impcting the approval process for hydropower, agriculture plantation and mineral sectors. 
  • Public concerns on hydropower and social impact issues have been raised to the National Assembly Standing Committee and conflict resolution has been pursued to safeguard interests of affected local communities and sustainable use of natural resources.
  • Developed policy brief on the impact of contract farming to raise awarness of poliy makers.
  • Facilitated the first research project on the impact of extractive industries in Lao PDR, results are expected by the end of 2015.
  • Increased coordination and collaboration between government agencies through direct intervention of project activities, most evident in the joint monitoring agreement of the Investment Promotion Department and the Department for Environmental and Social Impact Assessment to link their investment compliance database and environmental and social compliance database.

Who finances it?

Donors Amount
Swiss Agency for Development and Cooperation (SDC)
USD 3,108,558
Poverty Environment Facility (UNEP) USD 749,293 
United Nations Development Programme (UNDP)
USD 492,000
Total USD 4,349,851

Delivery in previous fiscal year

2014: USD 1,037,086 (72%)

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