Vientiane, 8 September 2025 – Lao PDR faces a defining financing challenge as it prepares for graduation from Least Developed Country (LDC) status in 2026. Preliminary assessments undertaken with the United Nations Development Programme’s (UNDP) technical support estimate financing needs of tens of billions of US dollars for the period 2026–2030, with acute gaps in financing climate and human development needs.

To address these gaps, the Ministry of Finance, in partnership with UNDP, convened a high-level policy dialogue on the Future of Development Financing in Lao PDR and launched the Climate and Sustainable Finance Hub. The event was held during the visit of the UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific, Ms. Kanni Wignaraja. 

The Climate and Sustainable Finance Hub, anchored at the Ministry of Finance, will serve as a technical platform to coordinate financing reforms, build capacity, and provide knowledge services on sustainable and climate finance. Its establishment marks a significant milestone in Lao PDR’s efforts to build resilient financing systems, strengthen governance of the Integrated National Financing Framework (INFF), and unlock resources for climate investments and sustainable development. The Hub is being established with financial support from the Embassy of Luxembourg and its Ministry of Environment, Climate, and Biodiversity, the Asian Development Bank and the INFF Facility.

Speaking at the dialogue, H.E. Madame Phonevanh Outhavong, Vice Minister of Finance, emphasized the government’s commitment:

“Lao PDR has made significant progress in sustainable finance as it was one of the first countries in the region to adopt a financing strategy for the 9th NSEDP using the international principles of the Integrated National Financing Framework, which was endorsed by the Prime Minister of the Lao PDR. 2025 is the final year of the 9th NSEDP and the Ministry of Finance is now accelerating the preparation of the 10th NSEDP for approval in early 2026. In addition, the development of the Financing Strategy for the 10th NSEDP and the establishment of the Climate and Sustainable Finance Hub are key measures taken by the Government to leverage and align financing for climate change solutions and human development.”

Ms. Kanni Wignaraja, the UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific, highlighted Lao PDR’s opportunity to advance financing reforms, noting both global pressures and national priorities:

“The global development financing system is being tested like never before. Sharp cuts in official development assistance are projected to reduce aid by 9–17 per cent in 2025. On the other hand, global wealth exceeds US$450 trillion, while the financing gap for achieving the Sustainable Development Goals stands at $4.3 trillion annually. The real task is to see how we transform the way finance is mobilized, allocated, and measured for development impact. In Lao PDR, financing the 10th NSEDP requires bold solutions and a bolder implementation drive. The launch of the Climate and Sustainable Finance Hub is a timely step forward, and UNDP is proud to accompany the Government and its partners in this journey.”

The event brought together senior government officials, development partners, and private sector representatives to discuss financing priorities for the upcoming Tenth NSEDP and to report on the progress of Ninth NSEDP Financing Strategy. Development partners and private sector actors stressed the need for coordination and to accelerate measures to ensure that financing needs for climate action and human development are met adequately.