The Government of Germany, through KfW Development Bank, has provided a grant of EUR 6.8 million (BMZ ID 2016 67 088) for a new Financial Cooperation (FC) Programme with the Lao PDR, i.e. the 'Vocational Education Financing Facility (VEFF)'. VEFF is to be seen as a continuation of KfW's previous engagement in the TVET sector such as the Vocational Training Programmes I - IV (VTP I - IV) and Vocational Education in Laos (VELA).

VEFF comprises the following three (3) components:

1. Support for the establishment of the VEFF
2. Support for the transfer of the VEFF into a national structure (Accompanying Measure)
3. Support for the extension of the Lao-German Technical College ('LGTC')

The LGTC is a vocational training school under the auspices of the Ministry of Education and Sports. It was founded in 1964 as part of Germany's development aid in Laos during that time and is supported today by the Federal Republic of Germany. The LGTC is divided into six main sections: automotive, metal machinery, electro-electronics, welding-plumbing, heavy equipment and agro-machinery. Each section has its own workshop; theory lessons are held in the main building.

Since the LGTC is closely connected with Germany and its (unique) dual training system, their objective is to include more and more companies in the training courses on offer, in order to provide a practice-oriented vocational education. Compared to the German system, in which vocational training is split up between vocational schools (theory) and the companies (practice), the LGTC developed a system whereby both parts are (partly) combined in the College.

Companies use the variety of machines and training devices in the College to offer training courses they cannot provide in their own workshop due to the lack of machines or personnel. Whenever possible, companies offer in-company training in their own workshops.

In the academic school year 2017 - 2018, nearly 2,000 students applied at the LGTC, but due to limited capacity only 962 students have been enrolled. The facilities of the LGTC are utilized to their full capacity. The automotive section is actually overloaded which is affecting the quality of training. Because of a lack of space for practical training while maintaining the high level of qualified training to meet the market demands, additional workshop area is needed.

To improve the current situation of limited space, the construction of new buildings and workshops on a second complementary compound is proposed. The secondary compound shall provide workshops and equipment for the training on Heavy Equipment (HE) and Agro-Machinery (AM) trades, which currently share the facilities with the students of the automotive trade. The shifting of HE and AM trades will consequently free additional space for the automotive section.

The total German FC contribution for the extension of the LGTC amounts to 1 million EUR; the Government of the Lao PDR will provide a counterpart contribution of another 1 million EUR.