The development objective of the First Programmatic Green Growth Development Policy Operation Project for Lao PDR is to support the Government in achieving fiscal stability and consolidating its pathway towards green growth. This programme document describes a development policy credit in the amount of special drawing rights (SDR) 28.5 million to the Government of the Lao PDR, the first in a series of three single-tranche programmatic development policy financing operations. Lao PDR has achieved rapid economic growth in recent years and poverty has declined, but inequality has increased and natural resources are being depleted. Economic growth in Lao PDR has relied on the exploitation of its natural resources and is not sustainable because of the depletion of the resources and increasing adverse environmental effects. The reforms program will incorporate green growth principles across the national development strategy and selected sectors. Pillar one will support economic management actions aimed at addressing key macroeconomic risks. Pillar two will provide the cross-sectoral foundation for improved direction, planning, and accountability to make the sectors of growth cleaner, more resource-efficient, and resilient. Pillar three will initiate implementation of targeted actions to reduce the environmental impacts of hydropower, logging, and agriculture, and ensure that growth generated from these sectors is sustainable in the long term. Pillar three will also initiate implementation of targeted actions to control air, water, and soil pollution, and improve environmental quality.
