The Government of Nepal and the Asian Development Bank (ADB) have signed agreements for loans and grants totaling $777.6 million (approximately Rs 105.59 billion) to fund critical infrastructure and development projects.
The agreements, signed on Friday, December 20, were inked by Finance Secretary Ram Prasad Ghimire and ADB’s Country Director for Nepal, Arnaud Cauchois, according to the state-owned news agency RSS.
The financing will be allocated to three major projects: the Kathmandu Valley Water Supply Improvement Project (Phase 2), the South Asia Subregional Economic Cooperation (SASEC) Electricity Transmission and Distribution Strengthening Project, and the Green, Resilient, and Inclusive Development (GRID) Program.
Kathmandu Valley Water Supply Improvement Project (Phase 2)
This project aims to enhance water supply infrastructure by relocating and constructing the Melamchi intake, building a long tunnel, and expanding the Sundarijal Water Treatment Plant. The total estimated cost is $240 million (approximately Rs 32.59 billion), with ADB providing $15 million (Rs 2.03 billion) in grants and the remainder as a concessional loan.
Additional support includes a $3 million (Rs 407.46 million) grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR) and $52 million (Rs 7.06 billion) from the Government of Nepal.
SASEC Electricity Transmission and Distribution Strengthening Project
This project is designed to meet Nepal's increasing energy demands and facilitate green electricity exports. ADB’s contribution includes a $30 million (Rs 4.07 billion) grant and a $311 million (Rs 42.24 billion) concessional loan, totaling $537 million (Rs 72.93 billion).
Additional funding includes $22.6 million (Rs 3.06 billion) from the European Union, $31 million (Rs 4.21 billion) from Norway, and $10 million (Rs 1.35 billion) from the Strategic Climate Fund. The Government of Nepal will contribute $132.4 million (Rs 17.98 billion) to the project.
Key components involve constructing 290 kilometers of transmission lines, establishing five new substations, and upgrading two existing substations.
Green, Resilient, and Inclusive Development (GRID) Program
The GRID program aims to address policy, regulatory, and institutional barriers to unlock sustainable investment opportunities across various sectors. ADB will provide $100 million (approximately Rs 13.58 billion) as budgetary support for this initiative.
RSS
