Lao PDR Adopts Sector Program Support to Improve Primary Health Care

MANILA, PHILIPPINES - Lao People’s Democratic Republic (Lao PDR), with support from the Asian Development Bank (ADB), is initiating the first-ever program assistance for the country's health sector.

ADB’s Board of Directors today approved a $10 million program grant, along with an accompanying $10 million project grant, to enable the country to meet health-related Millennium Development Goals (MDGs). The program supports the government’s 7th Health Sector Development Plan covering the period 2011-2015.

Lao PDR has made significant headway in lowering child mortality over the past 15 years, but child malnutrition remains high, the use of health services is low, and the country is likely to miss its 2015 MDG target for maternal mortality.

The program assistance will fund policy reforms in planning and finance, maternal and child health, and human resources development. The government has agreed to make the equivalent in program funding available to increase non-salary recurrent budget for better quality of services, the roll out of maternal and child friendly health services, health equity funds for the poor, and so-called ‘model healthy villages’ where the communities work together to ensure a healthy environment and access to care for all.

The project grant will fund investments that support the program goals, including the strengthening of provincial planning and budgeting capacities, training for birth attendants and other primary health care workers, and improvements to four district hospitals and 45 health centers.

“The Health Sector Development Program aims to increase the use of primary health care, particularly by the poor, women, children and ethnic groups, and also improve the quality of services on offer through investments from ADB, the World Bank and other partners," said Vincent de Wit, Principal Health Specialist in ADB’s Southeast Asia Department.

ADB’s assistance provides bridging funds, allowing the government to deliver service improvements in the short- to medium-term, while it builds up its own finances. One key source will be Nam Theun 2, a hydropower project, also supported by ADB, that will export electricity to neighboring Thailand. It is expected to start delivering significant revenues to the government by 2020.

The sector program approach has been aligned with other development agencies funding health care in Lao PDR, and will ensure that investments are coordinated, sustainable and address the government’s needs.

Both the program and project grants are from ADB’s concessional Asian Development Fund, with the program funds to be released in two tranches of $5 million each. The project grant makes up 93% of the total planned project investment of $10.8 million, with the government providing the balance in-kind. The Ministry of Health is the Executing Agency, with the program set to run from January 2010 to June 2012, and the project scheduled for completion by December 2013.