IFC advises on Laos integrated logistics facility
The International Finance Corporation will support Sitthi Logistics Company to develop an integrated logistics facility in Lao PDR in a bid to help promote cross-border trade.
The first-ever integrated logistics facility in the country, which will include the expanded Thanaleng dry port and the greenfield Vientiane logistics park, will signal a major shift from sea trade to road and rail for landlocked Lao PDR. To be developed as Build, Operate and Transfer project under a 50-year concession agreement with the government, the facility developer and the sponsor — Vientiane Logistics Park Company Limited and Sitthi Logistics Lao Company Limited — sought IFC's technical assistance.
IFC says it will assist in structuring the project in a way that will help attract experienced operating and financing partners, a move that will include developing structured risk mitigation strategies that may arise from key legal, regulatory, technical, financial, environmental and social issues. The work will see the development of performance standards for the project in line with international best practices.
Cross-border trade is expected to be boosted with the completion of railway lines connecting Lao PDR with China, Thailand, and Vietnam. It is estimated that 70% of the bilateral trade between China-Lao PDR and transit trade with Thailand, Malaysia, and Singapore could shift to rail through Lao PDR by 2030.
The first phase of expansion of the dry port is expected to be completed by the end of 2021, with the rest is to be completed by 2024. Meanwhile, the construction of the logistics park — including warehouses, distribution centers, export processing zone, and an industrial complex, among others — will be completed in phases between 2021 and 2030.
