Lao People's Democratic Republic : Climate-Friendly Agribusiness Value Chains Sector Project

Sovereign Project | 48409-004

The proposed project supports the implementation of the government's Agriculture Development Strategy to 2025 (ADS) by boosting the competitiveness of rice value chains in Khammouane, Saravan, and Savannakhet provinces, and vegetable value chains in Vientiane Capital, Champasak, and Sekong provinces. The project will improve the climate resilience of agricultural infrastructure, and enhance crop productivity, diversification, and commercialization. It will help improve the capacity for storage, processing, quality, and safety testing, and promote the use of biofertilizers and organic farming. It will strengthen the capacity of farmers and agribusinesses for climate-smart agriculture (CSA), and create an enabling environment for climate-friendly agribusinesses to promote sustainability along the value chain.

Project Details

  • Project Officer
    Zafar, Omer A.
    Sectors Group
    Request for information
  • Country/Economy
    Lao People's Democratic Republic
  • Modality
  • Sector
    • Agriculture, natural resources and rural development
Project Name Climate-Friendly Agribusiness Value Chains Sector Project
Project Number 48409-004
Country / Economy Lao People's Democratic Republic
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0585-LAO: Climate-Friendly Agribusiness Value Chains Sector Project
Asian Development Fund US$ 40.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agricultural production - Agro-industry, marketing, and trade - Irrigation - Rural market infrastructure

Gender Effective gender mainstreaming
Description The proposed project supports the implementation of the government's Agriculture Development Strategy to 2025 (ADS) by boosting the competitiveness of rice value chains in Khammouane, Saravan, and Savannakhet provinces, and vegetable value chains in Vientiane Capital, Champasak, and Sekong provinces. The project will improve the climate resilience of agricultural infrastructure, and enhance crop productivity, diversification, and commercialization. It will help improve the capacity for storage, processing, quality, and safety testing, and promote the use of biofertilizers and organic farming. It will strengthen the capacity of farmers and agribusinesses for climate-smart agriculture (CSA), and create an enabling environment for climate-friendly agribusinesses to promote sustainability along the value chain.
Project Rationale and Linkage to Country/Regional Strategy

The Human Development Index report ranks the Lao PDR as 138th out of 188 countries. Macroeconomic and political stability enabled it to achieve moderate economic growth at 6.5% per annum during 1986-2016. However, the country also grappled with a persistent current account deficit, falling foreign currency reserves, and growing public debt. Although the contribution of agriculture to the national gross domestic product is declining (from 32.7% in 2010 to 19.8% in 2016), the economy still remains agrarian: about 65% of the working population is employed in the sector. Low sector growth led to low levels of rural household incomes. The poverty rate of those engaged in agriculture is nearly three times higher than for those working in other sectors.

The government aims to increase the agricultural growth rate to 3.4% per annum by 2020. The policy framework for the agriculture sector is set out in (i) the ADS to 2025; (ii) the 8th Five-Year National Socio-Economic Development Plan (2016-2020); (iii) the Development Strategy of the Crop Sector 2025 and Vision 2030; and (iv) the National Strategy on Climate Change of Lao PDR. The ADS aims to (i) ensure food security; (ii) produce competitive commodities with a comparative advantage; (iii) develop a clean, safe and sustainable agriculture; and (iv) shift gradually to the modernization into a resilient and productive agricultural economy.

Impact

Agricultural competitiveness improved.

Project Outcome
Description of Outcome

Productive and resource-efficient agribusiness value chains developed in project areas.

Progress Toward Outcome The project was approved on 30 July 2018 and declared effective on 5 December 2018. The contracts with the project implementation consultants and financial management entity were signed on 23 and 30 December 2019 respectively. Mobilization has been slow due to COVID-19. All national individual consultants have been mobilized. An inception mission was conducted virtually from 31 August 2020 to 8 September 2020.
Implementation Progress
Description of Project Outputs

Critical agribusiness value chain infrastructure improved and made climate resilient

Climate-smart agriculture and agribusiness promoted

Enabling environment for climate-friendly agribusiness enhanced.

Status of Implementation Progress (Outputs, Activities, and Issues)

Following are findings of the Inception Mission:

(i) Thirty-six irrigation subprojects are being considered for rehabilitation. All long-listed subprojects were pre-screened and divided into three groups of priority, with the highest priority schemes to be included in the 2020 work program. To date, 5 irrigation subprojects were prioritized.

(ii) Thirty-three farm road subprojects (71 km) of which 6 road subprojects will be prioritized for support in 2020. Most research centers are not ready to receive and operate equipment and staff capacity building is required in most cases prior to procuring equipment. A detailed note on infrastructure needs and status of agricultural development centers, crop research centers at provincial colleges and associated costs of refurbishing as well as training program will be prepared.

(iii) Most research centers and laboratories are not ready to receive and operate equipment and that staff capacity building is required in most cases prior to procuring equipment. A detailed note on infrastructure needs and status of the centers and laboratories at provincial colleges and associated costs of refurbishing as well as training program will be prepared.

(iv) Thirty-four rice mills, 2 biofertilizer factories and 1 vegetable packhouse have been visited and most do not maintain financial and accounting records and that some of the rice mills identified during project processing phase are not operating anymore. Draft operational guidelines for MGS have been updated and will be submitted to ADB.

(v) PPIUs have identified 114 ponds for rehabilitation with an irrigable area of 1,760 hectares.

(vi) The TOR for IRRI will be reviewed to ensure that comprehensive support is provided to (a) deploy climate resilient rice and vegetable varieties, and (b) develop a commercialization program for NAFRI with recommendations on the legal framework to develop intellectual property rights and partial cost recovery.

(vii) A comprehensive master plan for capacity building will be developed by October 2020. To prepare the master plan, collaboration with other capacity building initiatives in project areas organized by development partners (e.g., FAO, World Bank/SNV, USAID) will be done.

(viii) The Inception Mission stressed that APG support should be linked with training on CSA and GAP. Additional efforts will be made to convince APGs on the need for adopting CSA and GAP in a changing climate.

(ix) DOA, DTEAP and MOIC (with support from PIC) will formulate a climate-smart gender-responsive agribusiness policy by 31 October 2022. Two studies will be commissioned: one on identifying priority agricultural products with processing potential, and another on comparative advantage of Lao PDR agribusinesses relative to those in Thailand and Vietnam.

(x) The project will (a) assist in overcoming gaps between Lao standards and international standards on GAP, GMP, organic products, HACCP, and (b) identify and train at least 30 agribusinesses towards achieving GMP and HACCP certification.

The Inception Mission requested PIC and FME to provide capacity building assistance to the financial sector to evaluate climate risks and recognize lending opportunities for banks and financial institutions for climate friendly investments by training at least 50 staff (30% women) from financial institutions in CSA lending and green finance.

Geographical Location Champasak, Khammouan, Salavan, Savannakhet, Sekong, Vientiane
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The three representative subprojects were found to have minimal environmental impacts and were classified as category C. However, category B is retained for the overall project as future subprojects, such as upgrade of access roads and tertiary canals, may have environmental impacts. An environmental assessment and review framework has been prepared to guide the screening and classification of each subproject during implementation and disclosed on the ADB website in March 2018. Subprojects classified as category A will not be financed. The environmental assessment and review framework includes an environmental code of conduct for contractors, which will be adopted for all category C subprojects to ensure adoption of good environmental site management practices. A project grievance redress mechanism will facilitate the resolution of any safeguard-related complaints.
Involuntary Resettlement Involuntary resettlement is classified as Category B. Subproject screening will identify and reject any category A subprojects that involve significant involuntary resettlement, economic displacement, or land acquisition. Due diligence conducted for the three representative subprojects shows that none will result in any physical or economic displacement. Two subprojects will not require land acquisition while the vegetable packhouse subproject will need minimal land acquisition through voluntary donation. A land acquisition and resettlement framework has been prepared to guide the screening and selection of subprojects as well as the resettlement planning process, and uploaded to the ADB website in March 2018. A rigorous due diligence procedure to verify bona fide voluntary donation is included in the resettlement framework to further screen and select subprojects during implementation and guide the preparation of any resettlement plans, if required.
Indigenous Peoples Indigenous peoples is categorized as Category B. Due diligence on the three representative subprojects showed that many ethnic groups are living in the project provinces. However, no indigenous peoples were found in the three representative subproject areas, and no indigenous peoples plan (IPP) was prepared. An ethnic group development framework, which was disclosed on the ADB website in March 2018, has been prepared to guide the preparation of IPPs as needed during project implementation, which will ensure inclusion and the full consultation and participation of ethnic group households and communities.
Stakeholder Communication, Participation, and Consultation
During Project Design

During project design, consultations were conducted with MAF, provincial, district, and village officials to determine project priorities, objectives, and confirm priorities and needs. Focus group discussions were also held with private crop collectors, mill operators, and other agribusiness actors and families living in the subproject target areas.

During Project Implementation The project became effective on 5 December 2018. Broad and meaningful consultations will continue through project implementation to build on the initial consultations held with various stakeholder groups during project preparation.
Business Opportunities
Consulting Services All consultants will be recruited following the ADB's Guide on the Use of Consultants (2013, as amended from time to time). MA will recruit project implementation consultants (PIC), financial management entity (FME), external monitoring agency, individual start-up management consultants, and individual finance and administration assistants. Advance contracting will be done for the (i) start-up management consultants, (ii) PIC, and (iii) the FME.
Procurement All procurement will be done following the ADB Procurement Guidelines (2015, as amended from time to time). MAF will rehabilitate access roads and tertiary canals, upgrade (and procure equipment) crop research centers and laboratories, and procure vehicles and office equipment for NPMO and PPMUs. Advance actions will be done for procurement of vehicles and office equipment/furniture.
Responsible ADB Officer Zafar, Omer A.
Responsible ADB Department Sectors Group
Responsible ADB Division Agriculture, Food, Nature, and Rural Development Sector Office (SG-AFNR)
Executing Agencies
Ministry of Agriculture and and Forestry - Department of Planning and Finance
Ministry of Agriculture and Forestry (MAF)
Timetable
Concept Clearance 12 May 2015
Fact Finding 16 Nov 2017 to 23 Nov 2017
MRM 13 Apr 2018
Approval 30 Jul 2018
Last Review Mission -
Last PDS Update 30 Sep 2020

Grant 0585-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Jul 2018 06 Sep 2018 05 Dec 2018 31 Mar 2025 30 Sep 2026 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 41.25 Cumulative Contract Awards
ADB 40.50 24 Jan 2024 10.42 0.00 26%
Counterpart 0.75 Cumulative Disbursements
Cofinancing 0.00 24 Jan 2024 8.84 0.00 22%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Climate-Friendly Agribusiness Value Chains Sector Project: Audited Project Financial Statements (January-December 2022) Audited Project Financial Statements Oct 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Procurement Plan Procurement Plans Mar 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Audited Project Financial Statements (January-December 2021) Audited Project Financial Statements Oct 2022
Climate-Friendly Agribusiness Value Chains Sector Project: Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Dec 2021
Climate-Friendly Agribusiness Value Chains Sector Project: Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Nov 2020
Climate-Friendly Agribusiness Value Chains Sector Project: Audited Project Financial Statements (5-31 December 2018) Audited Project Financial Statements Oct 2019
Climate-Friendly Agribusiness Value Chains Sector Project: Project Data Sheet (Lao Translation) Translated PDS Oct 2018
Grant Agreement (Special Operations) for Grant 0585-LAO: Climate-Friendly Agribusiness Value Chains Sector Project Grant Agreement Sep 2018
Climate-Friendly Agribusiness Value Chains Sector Project: Project Administration Manual Project/Program Administration Manual Jul 2018
Climate-Friendly Agribusiness Value Chains Sector Project: Gender Action Plan Gender Action Plans Jul 2018
Climate-Friendly Agribusiness Value Chains Sector Project: Report and Recommendation of the President Reports and Recommendations of the President Jul 2018

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (January-June 2023) Social Monitoring Reports Aug 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Safeguard Monitoring Report (January-June 2023) Environmental Monitoring Reports Jul 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (July-December 2022) Social Monitoring Reports Jul 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Safeguard Monitoring Report (July-December 2022) Environmental Monitoring Reports Mar 2023
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Safeguard Monitoring Report (January-June 2022) Environmental Monitoring Reports Oct 2022
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (July 2021-June 2022) Social Monitoring Reports Oct 2022
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Monitoring Report (July-December 2021) Environmental Monitoring Reports Aug 2022
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Monitoring Report (January-June 2021) Environmental Monitoring Reports Jan 2022
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (January-June 2021) Social Monitoring Reports Oct 2021
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (January-June 2020) Social Monitoring Reports Jun 2021
Climate-Friendly Agribusiness Value Chains Sector Project: Social Safeguards Monitoring Report (July-December 2020) Social Monitoring Reports Jun 2021
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Monitoring Report (January-December 2020) Environmental Monitoring Reports Mar 2021
Climate-Friendly Agribusiness Value Chains Sector Project: Land Acquisition and Resettlement Framework Resettlement Frameworks Apr 2018
Climate-Friendly Agribusiness Value Chains Sector Project: Environmental Assessment and Review Framework Environmental Assessment and Review Framework Apr 2018
Climate-Friendly Agribusiness Value Chains Sector Project: Indigenous Peoples and Ethnic Minority Development Framework Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Apr 2018

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
External Audit Firm - Consulting Closed
Preparation of Detailed Engineering Design, Feasibility Studies & Associated Services on ADB Rural Infrastructure Provision Sub-Projects (batch II) in Saravan, Sekong and Champasack Provinces, Lao PDR Firm - Consulting Closed
Detailed Engineering Design, Feasibility Studies & Associated Services on ADB Rural Infrastructure Provision Sub-Projects (batch II) in Khammouane Province Firm - Consulting Closed
Preparation of Detailed Engineering Design, Feasibility Studies & Associated Services on ADB Rural Infrastructure Provision Sub-Projects (batch II) in Savannakhet Province, Lao PDR Firm - Consulting Closed
Finance and Administration Assistant Individual - Consulting Closed
Finance and Administration Assistant Firm - Consulting Closed
External Monitoring Agency Firm - Consulting Closed
Finance and Administration Assistants Individual - Consulting Closed
Project Management Specialist Individual - Consulting Closed
Finance and Administration Assistant Individual - Consulting Closed
Finance and Administration Assistant Individual - Consulting Closed
project management & Coordination Specialist Individual - Consulting Closed
Finance and Administration Assistants Individual - Consulting Closed
Finance and Administration Assistants Individual - Consulting Closed
Finance and Administration Assistants Individual - Consulting Closed
Project Implementation Consultants (PIC) Firm - Consulting Closed
Financial Management Entity (FME) Firm - Consulting Closed
48409-LAO: Climate-Friendly Agribusiness Value Chains Sector Project Advance Notice Active

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
CS03 External Monitoring Agency Grant 0585 19 Dec 2022 Soksay Thavisab Consulting Sole Co., Ltd. | Access no. 03, Unit 2, House 031, Saphathongnue, Sisacktanak, VC Ministry of Agriculture and and Forestry - Department of Planning and Finance 105,149.00
FINANCIAL MANAGEMENT ENTITY Grant 0585 23 Dec 2019 AGRICULTURE AND FINANCE CONSULTING GMBH WITH | BAUNSCHEIDSTR 17 D-53113 BONN GERMANY Ministry of Agriculture and Forestry 1,720,741.00
PROJECT IMPLEMENTATION CONSULTANTS Grant 0585 30 Dec 2019 SOCIETE FRANCAISE DE REALISATION D'ETUDES ET | 92/98 BLVD VICTOR HUGO 92115 CLICHY CEDEX FRANCE Ministry of Agriculture and Forestry 6,042,678.00

Procurement Plan

Title Document Type Document Date
Climate-Friendly Agribusiness Value Chains Sector Project: Procurement Plan Procurement Plans Mar 2023