The Government of Nepal and the Asian Development Bank (ADB) have signed loan and grant agreements amounting to 777.6 million US Dollar (equivalent to Rs 105.59 billion) for the implementation of three projects and a program.
The Financing agreement for the implementation of Kathmandu Valley Water Supply Improvement Project (phase 2), South Asia Subregional Economic Cooperation (SASEC) Electricity Transmission and Distribution Strengthening Project and Green, Resilient and Inclusive Development (GRID) Program were signed.
At a program organized here today, Finance Secretary Dr Ram Prasad Ghimire, and Country Director of the Nepal Resident Mission, ADB, Arnaud Cauchois, signed the agreement on the behalf of the Government of Nepal and ADB respectively.
The project—Kathmandu Valley Water Supply Improvement Project (phase 2) aims to secure safe and reliable water supply services for people in the Kathmandu Valley. It includes the relocation and construction of the Melamchi intake, construction of long tunnel and the expansion of the Sundarijal Water Treatment Plant.
The project cost of Kathmandu Valley Water Supply Improvement Project (Phase 2) will be USD 240 million (equivalent to Rs 32.59 billion). The ADB will support USD 15 million (equivalent to Rs 2.03 billion) grant and USD 170 million (equivalent to Rs 23,08 billion) concessional loan, Japan Fund for Prosperous and Resilient Asia and Pacific (JFPR) will support USD 3 million (equivalent to Rs 407.46 million) grant and Government of Nepal contributes USD 52 million (equivalent to Rs 7.06 billion) for it.
Similarly, the project—SASEC Electricity Transmission and Distribution Strengthening Project focuses on meeting Nepal's growing energy demands while supporting green electricity exports. It will be USD 537 million (equivalent to Rs 72.93 billion). ADB will support USD 30 million (equivalent to Rs 4.07 billion) grant and USD 311 million (equivalent to Rs 42.24 billion) concessional loan, EU will support USD 22.6 million (equivalent to Rs 3.06 billion) grant, Norway will support USD 31 million (equivalent to Rs 4.21 billion) grant, Strategic Climate Fund will support USD 10 million (equivalent to Rs 1.35 billion) and Government of Nepal contributes USD 132.4 million (equivalent to Rs 17.98 billion) for the execution of this project.
The construction of 290 kilometers of transmission lines, five new substations, and the upgrading of two existing ones are key components of this project.
Likewise, the GRID program aims to assist in implementing the Green, Resilient and Inclusive Development approach by addressing policy, regulatory and institutional barriers to unlock sustainable investment opportunities across various sectors. The program's objective is to ensure that development activities are environmentally sustainable, resilient and inclusive.
The ADB will support USD 100 million (equivalent to Rs 13.58 billion) for GRID Program as a budget support.
The Irrigation Modernization Enhancement Project (IMEP) focuses on modernizing surface water irrigation systems of Nepal and piloting hill lift irrigation. It will directly benefit families of project area enhancing agricultural productivity and climate resilience.
On the occasion, Finance Secretary Ghimire expressed his heartfelt appreciation to ADB for its consistent support and partnership. He emphasized that these initiatives would not only improve irrigation system, water security and agriculture but also strengthen climate resilience I Nepal's most affected communities and contribute to achieving sustainable development goals.
Likewise, Country Director of ABD, Arnaud Cauchois, emphasized the key features of these projects, including their financing structures and significance for Nepal's economy.
He reiterated ADB's strong commitment to supporting Nepal's development priorities, particularly in climate adaptation, agricultural productivity and water resources management and support to achieve SDGs.
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