The Asian Development Bank has approved a technical assistance grant to the Lao People's Democratic Republic for a road improvement study. Laos is a landlocked country in which most things are transported over roadways. But as of 1981, the nation had only 2,100 miles of paved roads.
The ADB grant will be used to study the feasibility of improving dirt and gravel roads that serve important agricultural areas in the provinces of Attopeu, Champassak, Savannakhet and Sekong. The improvements would be designed to provide all-weather access and reduce transportation costs in the heavily populated southern region of Laos, where about 35 percent of the country's people live and much of its farm products are grown. The team of consultants will begin the seven-month study in November.
ADB Cuts Lending Rate
The Asian Development Bank reduced its lending rate on operations loans to 7.03 percent from 7.36 percent. The new rate will be in effect from July to December.
This is the second successive reduction in the bank's lending rate since the agency adopted a variable lending rate system in July 1986.
The bank's pool-based variable lending rate is adjusted on the first of January and July each year. It is determined by adding the cost spread (currently 0.50 percent a year) to the average cost of bank borrowings included in the pool.
The variable lending rate system replaced the bank's fixed lending rate system. Under that system, ADB's operations loans carried interest rates fixed at the time of loan commitment for the life of the loan.