LAO NATIONAL ROAD NR13 SOUTH (FL 20190324)

National Road 13 (NR13) South from KM 71 to KM 346 is the first allocation under the LAO RESILIENT ROADS FRAMEWORK LOAN (2019-324). The works are split into four sections, each financed by the EIB / World Bank and Asian Infrastructure Investment Bank (AIIB).

The proposed project is expected to finance road rehabilitation works of the National Road 13 (NR13) as the North-South corridor is the backbone network of the country, with the south section from Vientiane Capital to the Cambodian border damaged in 2018 by flooding and receiving only periodic and emergency maintenance. Through the upgrade, rehabilitation and maintenance with resilience features for climate and disaster risks, the project will improve road infrastructure and enhance connectivity in the Greater Mekong Sub-region and neighbouring ASEAN countries, enabling the Promoter to expand its road rehabilitation programme, in particular to road sections that require urgent rehabilitation as their current condition hampers economic development and access to public services. Investing in better quality roads which are more resilient to climate change not only helps to reduce the financial costs of road maintenance, but also ensures year-round access for the Lao population to basic services including healthcare (e.g. COVID-19 care) and education, as well as access to markets for trade.

An Environmental and Social Management Framework has already been prepared for the sub-project. The Promoter has confirmed that the sub-project does not require an environmental impact assessment (EIA) and an Initial Environmental Examination (IEE) is currently under preparation. This IEE will be assessed during appraisal along with any impact on protected areas. Gender issues will be considered to ensure that the road designs take into account the needs of various user groups. The Promoter will be required to verify that all investments are carried out in line with the EIB Environmental & Social (E&S) standards. The NR13 South is key connecter / artery between the complete south of the country and the capital/rest of the country, meaning that when the road is flooded, it is actually necessary to have ferry services to ensure that people and goods can travel. Thus, this sub-project aims to improve the climate resilience of the NR13 South and will contribute to Climate Adaptation objectives of Lao government, the Bank and the EU.

The sub-project will be procured under an Output and Performance Based Road Contracts (OPBRC), with a 10-year contract life. The procurement plan for this sub-project will include five contracts, namely: one consultancy contract for works supervision of approximately EUR 5 million and four works contracts (4 packages). EIB financing include three contracts covering for works contract package 2, package 4 and supervision contract. The works supervision contract will be procured through an international competitive bidding procedure with pre-qualification (restricted tender procedure). The works contract will be procured through an international competitive bidding procedure (open procedure) with two envelopes. The Bank will require the Promoter to ensure that implementation of the contracts financed by the Bank are done in accordance with the Bank's Guide to Procurement.

This operation is covered by the ELM Guarantee.

The proposed sub-project is in line with the objectives of the 2014-2020 External Lending Mandate through its contribution to the development of social and economic infrastructure. Furthermore, some project components will be designed to address climate vulnerabilities.