Representatives of the government and its development​ partners attend the launch of the feasibility study.

Govt launches study on financing for forest conservation

The government and its development partners recently launched a feasibility study on establishing a national Payment for Forest Environmental Services (PfES) system.
The initiative aims to develop a sustainable financing mechanism to protect the country’s forest ecosystems, following a sharp decline in forestry revenue since the suspension of logging in natural forests in 2013.
Traditionally, forest protection has relied heavily on international assistance, but the PfES system seeks to shift towards a domestically funded model.
Under the proposed system, economic sectors that benefit from healthy forests, including hydropower, ecotourism, and the water and beverage industries, would contribute financially to conservation and forest management.
This approach draws inspiration from Vietnam’s PfES programme, which generates around US$170 million annually, mostly from the hydropower sector.
 Laos and Vietnam have a Memorandum of Understanding on Cooperation in Forestry (2024-2028) that identifies PfES as a key area for collaboration.
Speaking at the launch workshop in Vientiane, Deputy Director General of the Department of Forestry under the Ministry of Agriculture and Environment, Dr Thoumthone Vongvisouk, underscored the importance of the initiative.
“PfES provides a pathway where those who benefit from these forest services can compensate those who manage and protect them. This creates a sustainable, domestically-funded model for conservation,” he said.
UN Resident Coordinator in Laos, Mr Bakhodir Burkhanov, highlighted the innovative nature of the project.
“The challenges posed by climate change force us to think seriously and innovatively about what we can do. In that context, the domestic Payments for Environmental Services is one such opportunity that is within our reach,” he said.
The feasibility study will be led by the Department of Forestry with technical support from FAO under the UN-REDD Programme and GIZ, with funding from Luxembourg, the European Union, and other donors.
The outcomes are expected to inform policy options and a roadmap for piloting and eventually scaling PfES nationwide.

By Times​ Reporters​
(Latest Update August 21, 2025)