ISSUE

Need for urban infrastructure and essential support services for increased trade and investment.

Towns along the North-South Economic Corridor (NSEC) which links Lao PDR with China, Thailand, and Myanmar are well positioned to serve as dynamic centers of investment and economic growth. The strategic location of the corridor towns provides the stimulus for increased trade and investment. Access to markets will provide many incentives for local economies in the hinterlands of the corridor towns. Given these development opportunities, and with the rapid growth of the urban population and expansion of these areas, several corridor towns are now facing demands for urban infrastructure and essential support services. Two project towns in Lao PDR along the NSEC, which traverses the region from the city of Kunming in Yunnan Province of the PRC to Bangkok, Thailand, were selected as project areas on the basis of their economic potential, environmental infrastructure constraints and expressed commitments. Houayxay is a medium-sized town and the administrative capital of Bokeo Province in the north-western part of Lao PDR and lies in proximate distance to the country's border with Myanmar and Thailand. Luang Namtha Town is the administrative capital of the Luang Namtha Province in the north-western part of Lao PDR bordering PRC and Myanmar. Luang Namtha Town is strategically located in proximate distance to the Lao PDR-PRC border. The project is in line with the ADB Country Partnership Strategy for Lao PDR; ADB's Urban Operational Plan which encourages economic competitiveness of cities, green development, and inclusive growth; the GrEEEn Cities Approach, which has been piloted in several cities in Viet Nam, Thailand, Myanmar, Malaysia, and Indonesia; ADB's Water Operational Plan; the GMS Strategic Framework; and the GMS Regional Investment Framework Implementation Plan (2014-2018). The towns under this project were selected and prioritized under the GMS Regional Investment Framework, as towns that are both localized within the GMS economic corridors and directly contribute to economic and urban development.