ADB Helps Nepal Boost Water Supply to Poor Households in Kathmandu Valley

News Release | 19 September 2011

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is extending an $80 million loan to Nepal for water distribution improvements which will benefit more than 2.72 million people in the densely populated Kathmandu Valley.

The ADB Board of Directors has approved the Kathmandu Valley Water Supply Improvement Project which will expand piped water access to many more households. Residents of Kathmandu Valley will get better quality water for more hours and at higher pressure. The project will reduce water losses in the distribution system and also raise the financial and asset management capabilities of agencies overseeing the sector.

The project will complement other ongoing water services work being carried out by ADB and its development partners, including the construction of the Melamchi tunnel which, when completed, will more than double the current available supply of water in the valley.

"The project will prioritize underserved areas and poor sections of the population in Kathmandu Valley," said Manoj Sharma, Urban Development Specialist in ADB's South Asia Department. "Piped water through individual connection will relieve women of the drudgery of collecting water, giving them more time for social and economically productive activities."

Kathmandu Valley's population has been growing at over 6% a year, but a lack of sustainable water sources and underinvestment has left many households with inadequate, low quality supplies which pose health risks, especially for the poor and for women.

The works planned under the new project will include the construction of additional bulk transmission systems and reservoirs, rehabilitation of water distribution networks, increased household connections, and the provision of 24-hour supplies in at least 10% of the targeted service area. A comprehensive non-revenue water reduction and asset management plan designed to minimize purchase and maintenance costs, will also be introduced.

The loan, from ADB's concessional Asian Development Fund, has a 32-year term with an 8-year grace period. Interest will be charged at 1% per annum for the grace term, and 1.5% for the balance. The Government of Nepal will provide $50 million for a total investment cost of $130 million.

The Ministry of Physical Planning and Works will execute the project which is due for completion in December 2016.