Lao PDR

Lao PDR

Infrastructure procurement: Infrastructure development has been identified as a priority for the country’s socioeconomic development. The 7th National Socio-Economic Development Plan (NSEDP 2011-2015) aimed to promote the development of infrastructure which is deemed to be key to reach Lao PDR’s 2020 Vision of seeing the country graduate from the Least Developed Country (LDC) group list. The main obstacle to infrastructure development will continue to be lack of government financial capacity.

PPP projects: Pilot projects with PPP characteristics have been implemented in the energy and transportation sectors, such as the Nam Theun2 hydro-power project, which was realised as a BOT. The NT2 Power Company Ltd (NTPC) had been mandated through a concession agreement to build, own, operate and transfer the project to the Government of Lao PDR at the end of a 25-year period.

Overview of Public Interventions
Subsidies & Guarantees
Incentives Direct payments and guarantees could be negotiated and included in the PPP contract. In addition, the government of Lao PDR supports foreign investment under the Investment Promotion Law, through for example tax and duty incentives such as:

• Income tax holidays
• Exemption or special rates for import duties for inputs depending on the sector
• Tax exemption on dividends
• Investment in social infrastructure, such as hospitals, schools, universities, research centres and some public utilities are exempt from rental or land concessions for 3 to 15 years, depending on the existing economic infrastructure.

More information can be found on Lao PDR’s Investment Promotion Department website.
Guarantees The government of Lao PDR provides a guarantee against nationalisation, expropriation or requisition without compensation.
Grants/Soft Loans
Viability Gap Funding (VGF) No VGF currently in place.
Other Public Support
Land Acquisition Support: There is no current framework to facilitate land acquisition for the private sector, however foreign investors are permitted to lease land for up to 20 years from a Lao national and up to 50 years from the government. Foreign ownership of land is not permitted, which leaves leasing and land concessions.
Project Development Fund (PDF) No PDF currently in place.
Lao PDR is currently considering establishing a Project Preparation Facility.