The Asian Development Bank has approved a $150 million concessional loan to improve the capacity of Tribhuvan International Airport and Gautam Buddha Airport in Nepal.

This will be the largest funding package the multilateral agency has given to Nepal's civil aviation sector so far. The Nepal government will chip in $48 million for the improvement project.

Tourism is a major source of economic activity in Nepal. In 2019, tourism generated an estimated $2.05 billion, which accounted for 6.7 percent of gross domestic product.

Tribhuvan International Airport in Kathmandu is the country’s only international airport and a major hub for domestic air transport. The Gautam Buddha International Airport in Lumbini will serve as an alternate international air transport facility for Nepal. Lumbini is the birthplace of the Buddha and is a pilgrimage and major tourist destination.

According to an Asian Development Bank official, $60 million will be spent on building a state-of-the-art international terminal building, known as Terminal 2 (T2), at Gautam Buddha International Airport in Bhairahawa.

Another $100 million has been earmarked for building a parallel taxiway at the southern side of the runway of Tribhuvan International Airport and a new hangar apron facility at the eastern side of the runway.

The total cost of the project, including value added tax, is $198 million.

“Asian Development Bank’s support will improve Tribhuvan International Airport’s safety, capacity, and operational efficiency. In addition, the new international terminal in Gautam Buddha International Airport will play a key role in boosting regional tourism in and around Lumbini,” said Asian Development Bank Senior Transport Specialist for South Asia Kai Wei Yeo.

“The project will help revive the country’s tourism industry and address the long-term negative effects of the Covid-19 pandemic.”

The loan will support the construction of a parallel taxiway extension and hangar aprons at Tribhuvan International Airport, and a new international terminal building at Gautam Buddha International Airport to increase capacity.

Another key component of the project is minimizing climate change impacts. This will be carried out by using clean energy materials, such as solar panels and installing energy-efficient lighting at the new airport terminal building.