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The Feasibility of NCF. The case of Environment Protection Fund, Lao PDR. By : Soukata Vichit. Fund name: Environmental Protection Fund Country: Lao PDR

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by soukata vichit

The Feasibility of NCF

The case of Environment Protection Fund, Lao PDR

By : Soukata Vichit


Fund name: Environmental Protection Fund

  • Country: Lao PDR
  • Objective: to strengthen environmental protection, sustainable natural resources management, biodiversity conservation and community development in Lao PDR

Governing body

Board of Directors (August 2012)

  • Deputy Prime Minister as Chairperson
  • Minister of Finance as Vice-Chairperson
  • Vice Minister of Ministry of natural resources and Environment (Member), ,
  • Vice Minister of Ministry of Energy and Mining (Member),
  • President of Lao Women Union (Member),,
  • Vice Governor of province(Member),
  • Vice President of Chamber of Commerce and Industry (Member),
  • President of the Association for Agricultural Production and Processing,
  • Vice President of Science and technology Council.

Legal status:

  • The EPF has been established as an autonomous organization, both financially and administratively, operating under the laws in Lao PDR. The EPF was established through the issuance of Prime Ministers Decree No146/PM dated 6 June 2005.
  • The EPF can absorb all kinds of contributions from donors and the private sector, although it cannot access a direct fiscal transfer from line ministries due to its off-budget nature.

[1] Note: US$ 1 = LAK 8,000

  • Any person,
  • Commercial entities,
  • Government organizations,
  • Civil society entities (NGOs)
  • To secure stable source of income for the environmental protection efforts
epf fund and climate finance
EPF fund and climate finance

Article 17of EPF Decree

  • EPF shall establish Specialized Financing Windows (SFW) for activities for environmental protection, sustainable exploitation, use and management of natural resources within any sector.
  • Government ministries, organizations and entities may propose the establishment of a SFW.
epf fund and climate finance1
EPF fund and climate finance
    • SFW may elect to establish their own managerial structure, or let the Executive Office operate and manage the window per agreement with the entity providing the capital contribution ..
    • The creation of other funds for environmental protection, natural resources, and/or biodiversity conservation separate from the EPF is not permitted. Such funds shall be established only as SFW under the umbrella of the EPF.
  • .
epf financing windows and access to af

End. Fund




  • PC
  • WRM


  • CBI
  • PC
  • -Sub grant


EPF Financing Windows and Access to AF


  • AF
  • WB
  • Grant
  • E P F
  • Land M
  • CC & A
  • ອື່ນໆ ?
  • Others
  • Sub grant
  • Sub grant
  • Sub grant


Sub grant


  • Sub grant
  • Sub grant
  • Sub grant
  • Sub grant
  • Sub grant
  • Sub grant

Sub grant

  • Sub grant
  • Sub grant
  • Sub grant
process of establishment
Process of establishment
  • The EPF establishment is provided by the environmental protection Law (1999) and was initiated as one of the conditions of the ADB Environment and Social Program (ESP) program loan (US$ 20 million) to the Government of Lao PDR;
  • The Prime Minister Decree 146 on the EPF establishment and operation was issued on 6 June 2005;
process of establishment1
Process of establishment
  • The Prime Minister Decree 72/PM appointing the EPF board of directors was issued on 1 November 2005,
  • In January 2006 the EPF board adopted and approved the EPF charter,
  • The Executive Director was appointed by mid April, and the World Bank grant was effective.
  • The process take more than 5 years
political support
Political support
  • The EPF BOD appointment was on 1 November 2005 and and the director of the executive office
  • the fund provided by April 2006. The EPF is an autonomous organization established by the Government and chaired by the Deputy Prime Minister.
resources invested in the establishment
Resources invested in the establishment
  • 5 years
  • ~ 6 men month (Supported by ADB)
  • Budget allocated (if any)
legal process
Legal process
  • The establishment of a fund in Lao PDR has to be provided by a law under which a specific Prime Minister Decree on the establishment and operation of the fund will be issued.
legal tools
Legal tools
  • EPF Decree
  • EPF Chapter
  • EPF Operation Manual
  • Technical Guideline and application form
  • Financial and procurement Manual
  • Sub grant Implementation Manual
institutional framework

Board of Directors

PSC of Window/project

Inter.Advisor (where is needed

Executive Director

Assistant to the ED (2)

Admin Assistant

  • IT (1)

Financial Unit

Manager (1)

Technical unit

Planning Manager (1)


Office Cleaner (1) ​

Project(s) Accountant (2)

Procurement Officer (1)

  • Cash(1)

Provincial facilitator (s)

Institutional Framework

Window & M&E manager

Window & M&E manager

Window & M&E manager

Window & M&E manager

Window & M&E manager

human and institutional
Human and institutional
  • For the management of the EPF, the EO has actually 15 staff with about 20% of the total annual budget for the operation cost.
lesson learned success factors
Lesson-learned: Success Factors

Different types of funds

  • The EPF has proven that it is beneficial to create a structure of a national fund that can accommodate different types of funds.
  • The EPF can serve as an institution that provide financial service
  • The EPF can directly receive the financial assistance by a creating of a specific window
lesson learned success factors1
Lesson-learned: Success Factors


  • The EPF manage fund according to international standard in financial integrity as well as social and environment safeguard
    • inclusion of detailed procedures of financial management and social environment safeguard in the Charter and Operations Manual
    • most of the grants have been managed according to the World Bank’s standards
lesson learned success factors2
Lesson-learned: Success Factors

Reaching local beneficiaries

  • The EPF and the Small Grant Project have been the only initiatives that channel financial resources to local stakeholders in the field.
lesson learned challenges
Lesson-learned: Challenges
  • Different types of funds
    • An endowment fund was created to ensure sustainable income to finance the operations of the EPF, but a sustainable source of capital has not been identified.
    • Without sustainability the turn over rate of staff occurred and may reduce confidence of donor agencies in providing contributions to the fund.
lesson learned challenges1
Lesson-learned: Challenges
  • Standards
    • there has been a concern about the high turn over rate.
    • However, with the established system in place, building the capacity of human resources would be faster compared to the process of establishing the system from scratch.
  • EPF Executive Office

POBox: 7647

2nd Floor, MONRE Building, Sidamduan Road,


Tel: (856 21) 252739

Fax: (856 21) 252741

http: //