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||10 March 2010
Thailand extends $19 million loan to Laos for road construction
The Thai Cabinet on Tuesday gave a green light to lend 655 million ($19.8 million) to neighbouring Laos PDR for two road improvement projects, according to Finance Ministry.
The Neighbouring Countries Economic Development Cooperation Agency (NEDA) reported that financial assistance worth Bt655 million will be allocated for two road improvement projects in Laos.
The 250 million baht (nearly $7.6 million) loan will be used for improving roads and the municipal drainage system in Vientiane, the Lao capital, aiming to develop basic infrastructure in the inner capital city and to solve traffic congestion as well as flooding.
NEDA, under the supervision of the finance ministry, said the Thai government's soft loan to Laos PDR is to mark the 60th anniversary of warm diplomatic relations between the two countries and to celebrate the 450th anniversary of Vientiane’s establishment.
Meanwhile, the other 405 million baht ($12.3 million) budget will be distributed for the R3 road improvement project in order to fix the road damaged by natural disaster and for safety. The R3 road links Thailand’s Chiang Rai to China's Kunming province via Laos under the Great Mekong Subregion coooperation.
Regarding to the financial aid for both projects, NEDA has received financial support from government-owned financial institutions in order to provide soft loan for the neighbouring country.
The Thai finance ministry said the loan will foster Thailand’s foreign policy implementation through economic development cooperation with neighbouring nations and to improve quality of living as well as boost better
understanding of Thai-Lao friendship among the Lao people.
The road projects will help increase demands in services and products from Thailand and also will strengthen Thailand's role towards the Mekong neighbour.
According to the contract conditions, Laos has to buy materials and services from Thailand, not less than 50 percent of the monetary value mentioned in the contract.
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