The Asian Development Bank’s (ADB) is providing a $150 million loan to improve urban service delivery and infrastructure in eight municipalities in southern Nepal.

The project will enhance the resilience of municipalities, where over 1.5 million people live, says a statement issued by the Manila-based multilateral lender.

“Improving urban infrastructure and service delivery in major urban areas in Nepal, including in the Terai region, is a must given their importance to the country’s economy and development,” the statement quotes Vivian Castro-Wooldridge, ADB’s urban development specialist, as saying.

“Toward these aims, the project will ensure that people in the southern parts of Nepal are living in areas that are safe, sustainable, inclusive and resilient to climate change.”

Urbanisation in Nepal is growing at a rapid pace—at about 6 percent per annum since the 1970s. However, this has not contributed significantly to inclusive economic growth due to inadequate urban planning, weak institutions, neglected operations and maintenance (O&M) of existing urban infrastructures, and limited technical capacity.

To address this issue, the government, according to estimates, will have to double its spending on urban infrastructure to $24.5 billion till 2030, says the statement.

The Regional Urban Development Project will focus on eight municipalities in the southern Tarai region, including four municipalities in the less-developed Province 7 in far western Nepal.

The Tarai is the region where a significant portion of Nepal’s urban population lives and where majority of the landlocked country’s trade activities take place via municipalities in Biratnagar, Birgunj and Siddharthanagar. Province 7, bordering India, is one of the poorest and most vulnerable provinces in Nepal, with 40 percent of the people living under poverty and almost none having access to proper waste collection and treatment facilities.

“The project will enhance urban infrastructure in municipalities in the Terai region, incorporating climate-resilient and sustainable features, reducing flooding duration to less than an hour in eight municipalities,” says the statement.

This includes construction and rehabilitation of 200 km of stormwater drains; improvement of 240 km of roads; construction of at least 40 km of footpaths responsive to the needs of elderly, women, children, and people with disabilities; building of four sanitary landfills and resource recovery centres; and construction of 20 km of sewers while connecting 7,500 households to the sewage system in Biratnagar, among others.

The project will mark ADB’s first investment in urban infrastructure in Province 7 and will improve flood management, mobility and solid waste management, according to the statement.

It will also assist the development of urban plans and bylaws that reflect greater disaster risk resilience, improved land management, and regional development.

Municipal capacity will be strengthened through the implementation of a performance-based socioeconomic development programme, adds the statement.

The project will also support a project development facility for the preparation of a pipeline of urban infrastructure projects, particularly in solid waste management, drainage, roads, water supply, and sanitation, with high readiness to reduce future start-up delays, says the statement.