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    Reference: 20130587
    Release date: 16 December 2014

    Promoter – Financial Intermediary

    PUBLIC ENTITY(IES)

    Location

    Description

    The project is to construct a BRT (Bus Rapid Transit) system in Vientiane in Lao People's Democratic Republic. The BRT system will consist of 11.5 kilometres of dedicated bus lanes and 21 enclosed stations; the project will also set up a city transport agency and improve pedestrian facilities near bus stations (e.g. signalised crossings, street lighting, pavement upgrades and universal accessibility). It is expected that 96 new BRT buses purchased would meet a minimum EURO IV emissions standard (clean technology). To ensure traffic circulation after construction of the BRT system, the project also includes several traffic management measures (including new traffic signals at key intersections) and parking management and enforcement for on-street paid parking in the city centre area, using electronic meter technology.

    Objectives

    The proposed project is in line with EIB's External Lending Mandate 2014-2020 (ELM) as it will contribute to the fulfilment of ELM's objectives of (i) climate change mitigation (i.e. replacing private vehicles with cleaner public transport and improving fuel use efficiency through reduction of traffic congestion), and (ii) supporting social and economic infrastructure (i.e. improving public transport and road safety) in Lao PDR. The project also encourages the development of the private sector (i.e. operation of the public transport service and parking facilities as well as tourism and other economic activities). The project is in line with the EU-Lao PDR Strategy as well as the EU's global strategy (emphasising the need for more energy efficiency and resilience). In addition, from a donor coordination perspective, this multi-partner supported project is consistent with the aid-effectiveness principles of the Paris Declaration, Accra Agenda and Busan Partnership, endorsed by the European Commission and embedded in the EU's development policy. The project is aligned with the Lao Strategic Framework for National Sustainable Development Strategy (NSDS); and its National Rio 20 Report. and is consistent with the draft National Strategy and Action Plan for Environmentally Sustainable Transport, currently under government review.

    Comments

    The project is expected to generate savings in user time, vehicle operating costs, road accident costs, local air/noise emissions as well as a reduction in greenhouse gas emissions as a result of the expected modal shift from car to bus. Without the project, transport in Vientiane would be increasingly in individual vehicles, with substantial adverse environmental impact on quality of life in general. The financial and economic case for the project is to be assessed during appraisal. For this project, the European Commission has approved an EUR 5m grant under the Asian Investment Facility which will provide support to the project's detailed design, implementation, management and monitoring. This operation is covered by the EU Guarantee for EIB loans outside the EU.

    Sector(s)

    Under ELM Guarantee

    This operation is covered by the EU Guarantee for EIB loans outside the EU.

    Proposed EIB finance (Approximate amount)

    EUR 19 million

    Total cost (Approximate amount)

    EUR 88 million

    Environmental aspects

    If the project were in the EU, it would fall under Annex II of the Environmental Impact Assessment (EIA) Directive, in which case the competent authority would determine whether the project should be subject to an EIA. In this case, the Lao Ministry of National Resources and Environment (MONRE) stipulated that no full EIA is required. Instead an initial environmental examination (IEE) was required. The IEE report was completed in 2014 and included an environmental management plan (EMP). The Bank's finance will be subject to approval of the IEE by MONRE, and incorporation of the EMP in all the civil works contract documents. Involuntary resettlement is expected to be minimal. No private land purchase is foreseen at this stage, as all affected land and structures identified are owned by government organisations. A resettlement plan describing affected public properties, the relevant policy framework and compensation mechanism has been prepared and will be updated after the detailed design is completed. Bank finance will be subject to approval and implementation of the resettlement plan, and compliance with relevant EIB social standards.

    Procurement

    The Bank will require the promoter to ensure that project implementation is done in accordance with the Bank's Guide to Procurement.

    Status

    Signed - 30/11/2015

    Disclaimer

    Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The data provided on this page is therefore indicative and cannot be considered to represent official EIB policy (see also the Explanatory notes).

    Related tags

    Lao People's Democratic Rep. Transport