Lao PDR's vulnerability to climate change impacts is exacerbated by its limited resources and capacity to invest in adaptive climate measures to protect its economy and rural population. Since 16 per cent of the country's GDP stems from agriculture, forestry, and fisheries, the government has identified these sectors as priority areas in its climate strategies including the National Adaptation Programme and Nationally Determined Contribution.

The ‘Scaling up the implementation of the Lao PDR Emission Reductions Programme (Project 2)’ aims to address decades of forest loss. Building on and coordinating with complementary initiatives including the success of FP117 (GIZ Laos Project 1), Lao PDR leverages GCF funding to further remove investment, policy, and financing barriers to create a sustainable environment for deforestation-free development, integrated with adaptation principles. To support the transition to sustainable and climate-resilient management of forests and landscapes at scale, Project 2 aims to first, scale-up climate-informed participatory land use planning, strengthen land tenure security, improve forest law enforcement and ensure access to sustainable financing; second, address key drivers of deforestation and degradation within the agricultural sector through reducing the expansion of agricultural activities into forested landscapes, and promote climate-resilient agricultural practices that increase the resilience of local farmers and agri-ecosystems; and lastly, strengthen community resilience through sustainable forest landscape management and the promotion of Forest Landscape Restoration, with a focus on village and conservation forests. 

Financial sustainability of the project is realised through substantial additional funding from the Forest Carbon Partnership Facility (FCPF) Carbon Fund with the World Bank and other co-financing from supporting institutions.