The Asian Development Bank (ADB) has agreed to provide $150 million (approximately Rs15.4 billion) loan assistance for implementation of the Regional Urban Development Project. An agreement to this effect was signed at the Ministry of Finance on Monday between Finance Secretary Shankar Prasad Adhikari and ADB Country Director Mukhtor Khamudkhanov.

The interest rate on the loan will be 1 percent per annum during eight-year grace period and 1.5 percent thereafter, says a statement issued by the Ministry of Finance. The assistance will be utilised through “on-budget mechanism”, adds the statement. The Regional Urban Development Project aims to develop urban infrastructure in various parts of Nepal and enhance effectiveness and efficiency of urban service delivery mechanisms. The project will cover eight municipalities in southern Tarai and far-western parts of Nepal, including Birgunj, Biratnagar, Siddharthanagar, Nepalgunj, Bheemdatta, Dhangadhi, Godawari and Shuklaphanta municipalities. The executing agency of the project is the Ministry of Urban Development and implementing agencies are concerned municipalities and Kailali-based office of the Department of Urban Development and Building Construction. The expected completion date of the project is December 31, 2022.

The main objective of the project is to enhance sustainable urban development and attain balanced regional development, according to the statement. The project is expected to rehabilitate urban infrastructure in eight municipalities in line with climate resilient and sustainable designs, strengthen capacity of these municipalities,

and enhance project preparation capacity of these municipalities.

The project will enhance urban infrastructure in the Tarai region, reducing flooding duration to less than an hour in eight municipalities. This includes construction and rehabilitation of 200 km of storm water drains, improvement of 240 km of roads, and construction of at least 40 km of footpaths, four sanitary landfills, resource recovery centers and 20 km of sewers.