The Asian Development Bank said it will provide Laos with a US$10 million ( Ђ 8.35 million) loan-and-grant package to develop forest plantations to stimulate jobs and income in the poor Southeast Asian country.
The funding consists of a US$3 million ( Ђ 2.5 million) grant and a US$7 million ( Ђ 5.85 million) loan, carrying a 32-year-term, the bank said in a statement late Tuesday. During an initial eight-year grace period, the loan will carry a 1 percent interest rate, which then rises to 1.5 percent.
The government of Laos will select land that can be developed into forest plantations and help some 2,000 households establish small plantations covering 9,500 hectares (23,475 acres) in the capital, Vientiane, and the Bolikhamzay, Saravane and Champasack provinces, the statement said.
"The development of livelihood plantations is an effective way to reduce poverty because it helps create jobs and assets, and provides an additional and alternative source of income for poor households," Akmal Siddiq, an ADB project manager was quoted as saying in the statement.
The ADB also said the government would provide technical, financial and other support to medium-sized plantations and help facilitate the entry of big firms to the project, which will be overseen by the Ministry of Agriculture and is expected to be completed around the end of 2011, reports the AP.