South Asia

ADB’s country operations were consistent with the goals and objectives of the results-based country strategy and program, which focuses on transport, power, urban development, and financial and private sector development. ADB approved loans for two projects—the Urban Infrastructure Development Project ($24.6 million) and the Financial Sector Development Program ($13.0 million). The project aims to improve urban infrastructure facilities and basic urban services in Thimpu and Phuentsholing, Bhutan’s two largest cities, as well as in Dagana, a regional center. The program will improve governance, promote a better investment climate, and encourage greater private sector participation to ease constraints facing Bhutan’s financial system.

ADB also approved five technical assistance grants for a total of $1.9 million, four of which were for institutional strengthening and capacity development in urban infrastructure, the financial sector, and debt management. Grant assistance from the Japan Fund for Poverty Reduction amounting to $1.0 million was approved for rural electricians’ training. ADB also processed, through the Australia–ADB South Asia Development Partnership Facility, a grant assistance for $0.5 million (part of the approved $8.5 million Development Partnership Program for South Asia regional technical assistance) to support anticorruption efforts and good governance at the local level.

Lighting Up Lives in Rural Bhutan

Economic activity has picked up with the provision
of electricity

Darkness used to fall early in the Himalayan country of Bhutan. In remote villages without electricity, this meant parents stopped work early and children could not do much studying at home. The lack of electricity also limited the work of hospitals and the availability of school facilities.

Since 2003, ADB and other international organizations such as the Japan International Cooperation Agency have helped dispel some of the darkness through a program of rural electrification. The Rural Electrification and Network Expansion Project has brought electricity to over 8,000 new consumers, including poor households, hospitals, and schools.

Part of the loan included a special feature to provide electrification kits to the poorest households. A large barrier for the poorest households is the cost to connect the house to the distribution system in the village, which was about $75, as well as the cost of doing internal wiring in the house. To address this, the loan developed criteria to identify the poorest households and provide them with the electrification kits, which included a load limiter switch (instead of a meter), cables for connecting to the distribution system, and wires and outlets for wiring the house.

As more villagers use electricity for light, cooking, and heating, people fall sick less often. In particular, fewer women now suffer from eye and respiratory ailments caused by kerosene lamps and wood fires.

As women increasingly use electrical appliances like rice cookers, they have more time to augment their meager family incomes with cottage industries like weaving and tailoring. Both men and women are able to work longer hours, thanks to electric lighting. Other income-earning activities that have increased in the project areas are microenterprises and cottage industry, including carpentry and carving.

Dorji Wangmo of Decheling Gewog village is delighted that she can now put on the rice cooker and sit to weave. “Sometimes I keep on weaving till late night because during the day I have to attend to other household works,” she said.

Educational opportunities have improved for children and adults: children can study after sundown and adults attend evening classes conducted by the Department of Education in the project areas.

A villager in Gelephu village said, “Now we don’t have to depend on timber for cooking and our children can also do their studies in a better way.”

The project’s environmental benefits include less pressure on forests as a source of household fuel. Since 1995, when ADB first supported a rural electricity project in Bhutan, kerosene use has come down from an average of 10 liters a month to 1 liter.

Electrified villages have also reported a drop in theft, burglary, and vandalism with light deterring criminals.

Fewer women now suffer from eye and respiratory ailments caused by kerosene lamps and wood fires