Expanding Water Supply and Sanitation Coverage through Output-Based Aid

Publication | March 2011

The Asian Development Bank is set to undertake its first output-based aid initiative. Will it prove to be the right modality for Nepal’s small towns and their water supply and sanitation concerns?


  • Output-based aid (OBA) is a scheme that uses performance-based grants to support delivery of basic services to traditionally marginalized poor households.
  • Such schemes have generally targeted rural villages but, on occasion, large cities. For its first use of OBA, ADB will test the scheme in small towns in Nepal.