In addition floods have an adverse impact housing, health and education, industrial activities, and infrastructure (transportation, water and sanitation). As an example the flooding in 2005 caused widespread disruption and the estimated economic costs were USD 29 million3. Lao PDR is also experiencing increasingly frequent episodes of drought. Severe drought occurred in 1996, 1998 and 2003. It is estimated that 6 out of 17 provinces are already at high risk of droughts.