ADB approves $115m concessional loan to improve water, sanitation in Nepal

KATHMANDU: Asian Development Bank (ADB) has approved $115 million concessional loan to improve resilient water supply and sanitation services and strengthen institutional capacities in rapidly growing municipalities across Nepal.

The Integrated Water Supply and Sewerage Management Sector Project is expected to directly benefit more than 850,000 people in 13 municipalities. The Ministry of Infrastructure Development will implement the project with support from the Department of Water Supply and Sewerage Management and participating municipalities.

“Rapid urbanisation in Nepal is placing increasing pressure on the delivery of crucial urban services, leaving many communities with unreliable water supply and limited sanitation access,” said ADB Country Director for Nepal Arnaud Cauchois.

ADB said the project will expand water supply coverage by constructing about 64 tube wells, treatment facilities with a combined capacity of about 60 million litres per day, and approximately 2,125 kilometres of water distribution network. Around 72,000 households, including vulnerable and women-headed households, will receive pressurised piped water connections.

Sanitation services will be expanded and improved in selected municipalities through upgraded sewerage and drainage networks, and new or rehabilitated wastewater treatment plants and faecal sludge treatment facilities. More than 120,000 properties are expected to gain access to enhanced sanitation services.

The project integrates adaptation and mitigation measures, supported by $75.27 million in dedicated funding, and is expected to reduce greenhouse gas emissions by more than 22,000 tonnes of carbon dioxide equivalent a year. It will also bolster municipal capacity in asset management, financial sustainability, digital systems, and public awareness on hygiene and hazard risks.

“This project will expand access to safe and reliable water and sanitation services, strengthen resilience to natural hazards and disaster risks, and support healthier, more livable, and sustainable cities while promoting economic opportunities and inclusive growth,” ADB said.

ADB’s financing for the project is complemented by $28.8 million in government counterpart funding, bringing the project’s total value to $143.8 million. The project supports the government’s Sixteenth Plan, aligns with ADB’s country partnership strategy for Nepal, and builds on ADB’s long-standing partnership with the country towards more integrated and sustainable wastewater management systems.

The project is scheduled for completion by June 2032.