IFC, a member of the World Bank Group, is lending $2 million to Aanandi Lao Co. Ltd, a property development company, for the construction of one of the first of its kind, international best practice, multi-story serviced apartment building in Vientiane capital. The project will support the development of much-needed business-enabling infrastructure in Lao PDR, drawing investors and creating jobs, thus contributing to the country’s sustainable growth.
A resource-rich economy, undergoing a structural transformation, Lao PDR’s gross domestic product growth has averaged 7.8 percent per year over the past decade, making it the 13th fastest-growing economy globally. In the last few years — with the government trying to mobilize foreign and domestic investments — Lao PDR has been attracting a growing number of foreign investors and business travelers. The country expects to welcome five million inbound visitors this year. This has significantly increased the demand for quality housing facility for international professionals on term assignments.
IFC’s investment will address this gap through the construction of a residential building comprising 76 units of serviced rental apartments. Located in the heart of the capital, the Aanandi Riverview building will be completed over the course of 24 months, with the apartments expected to be in serviced operation by 2020.
“We greatly appreciate IFC’s long-term financing commitment and it is aligned to our group’s long-term vision to raise Laos real estate market to an international playing level,” said Sue Ma, Business Development Director, Aanandi Group. “Furthermore, with IFC’s and our Japanese partner, Toshihiko Muneyoshi, it will add creditability and bring in global knowledge as well as technical and industry expertise to this project that prepares us for more future housing projects in Lao PDR.”
The project will ensure sustainable employment creation and skill transfer to local Lao workers, particularly in the construction and hospitality management sectors. While 150 people will be directly employed from the local community, the company will offer training programs to its employees, addressing needs in the local construction labor market and skills improvement in the local service culture. The project will also support local suppliers by creating demand for locally sourced materials and services.
In addition to financing, IFC is supporting the company to adopt international best practice construction, including environmental and social impact assessment. The apartment building will achieve IFC’s green building standards with the aim of reducing energy, water, and construction materials consumption by at least 20 percent compared with similar buildings.
“With the construction of one of the first international standard serviced apartment complexes in Vientiane, the project demonstrates the potential for growth in the sector – at this standard level -helping to make a market for future similar projects and enhancing the competitiveness of Lao PDR as an investment destination,” said Kyle Kelhofer, IFC Country Manager for Lao PDR, Cambodia and Vietnam.