ADB Provides Additional $30 Million for Airport Upgrades in Bhairahawa

KATHMANDU, NEPAL – The Asian Development Bank (ADB) will provide an additional $30 million loan to the Government of Nepal to scale up the upgrading of the Gautam Buddha Airport (GBA) in Bhairahawa into an international airport with higher air safety standards.

“Airport upgrading is critical to further developing nearby Lumbini, the birth place of Lord Buddha, into an attractive cultural and tourism destination. The number of foreign visitors to Lumbini is rapidly rising in the recent years, and airport improvement will help in further opening Lumbini and linking it with international tourist circuits in South Asia as well as to the rest of the world,” said Kenichi Yokoyama, ADB’s Country Director for Nepal.

Upon completion, the international airport is expected to serve 760,000 passengers by 2030, including 280,000 visitors to Lumbini, which is 20 kilometers west of the GBA. In addition to helping increase the number of visitors to Lumbini from the traditional markets of India, Myanmar, Sri Lanka, and Thailand, the upgrade is expected to increase the number of visitors from the People’s Republic of China, Japan, and the Republic of Korea, among others.

ADB approved the South Asia Tourism Infrastructure Development Project, of which the GBA upgrade is a part, in November 2009 to develop and improve tourism-related infrastructure in Bangladesh, India, and Nepal. The Nepal portion of the original project is funded through a loan and a grant from ADB’s Special Funds resources, each equivalent to $12.7 million, a loan from OPEC Fund for International Development for $15 million, and the Government of Nepal for $6 million. On top of these, ADB’s additional loan of $30 million, along with $17.7 million from the Government of Nepal and $3 million from the Asian Clean Energy Fund (ACEF), will finance the overall project cost of the Nepal component that is now estimated at $97.2 million.

The additional financing will support the restructuring of the project including the increased scope of the GBA from the originally designed regional international airport to a full-fledged international airport that can accommodate wide-body airplanes. The scaling up of the original upgrade design will add 400 meters to make the runway length to 3,000 meters, overlay the existing 1,500 meter runway for use as a parallel taxiway, construct a new 15,169 square meter terminal building, improve drainage, and install more advanced navigational aids, equipment, and airport lighting for safety.

After completion of the upgrading, the GBA will also serve as an alternate international air transport point for Nepal in the event of poor weather conditions or in case natural calamity shuts down Tribhuvan International Airport (TIA), the only international airport in the country at the moment.

The Civil Aviation Authority of Nepal (CAAN) is the implementing agency for GBA upgrading. ADB’s administration of a grant to be provided by ACEF for the additional financing will support the introduction of clean public transport services using electric vehicles for tourists and local residents in Lumbini area. This will help reduce noise and pollution from poorly maintained diesel and gasoline engine buses and add value to tourism experience. The Lumbini Development Trust is the implementing agency for tourist destination improvement component.