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ADB Supporting Development of Bhutan's Secondary Towns

News from Country Offices | 19 June 2018

THIMPHU, BHUTAN (19 June 2018) — The Board of Directors of the Asian Development Bank (ADB) has approved a $10 million loan to help develop the secondary towns of Samdrup Jongkhar, Sarpang, and Trashigang in becoming economic hubs, spurring more inclusive growth and balanced urban development in Bhutan.

“The growth of Bhutan’s secondary towns is constrained by deficiencies in infrastructure and basic urban services resulting from inadequate urban planning, limited resources, and weak urban institutions,” said ADB Urban Development Specialist Ms. Shinjini Mehta. “ADB’s support will help the three secondary towns reach their high economic potential with the provision of quality infrastructure thereby facilitating vibrant economic activities in these towns.”

The project is in line with the Government of Bhutan’s strategy for urbanization that aims to groom secondary towns, which suffer from infrastructure deficits and urban management issues, into regional economic hubs through the development of trade, transport, logistics, and manufacturing.

ADB’s support will improve water supply and sewerage networks in Samdrup Jongkhar, a gateway town to India’s Assam state, which is a key border town in the South Asia Association for Regional Cooperation road corridor 5. Piped water supply, meanwhile, will be provided in Sarpang’s new satellite town along with drainage and road infrastructure development, which will enable investments in housing and business development in the area.

Samdrup Jongkhar and Sarpang, located in the southern border region of Bhutan, currently get less than 8 hours of water supply. This highlights the need for the development of quality urban infrastructure, with both towns being located in the vicinity of two of the four industrial estates being developed by the government to promote manufacturing and create jobs.

The project will improve water supply services and non-revenue water management as part of a larger urban development plan in Trashigang, the largest urban center in eastern Bhutan. With the town’s recent access to air connectivity and strategic location in the east-west highway, Trashigang is being billed as an important tourist gateway to the less-explored areas in the eastern part of the country.

Total cost of the project, which will also support institutional capacity development for municipal infrastructure assets management, is $12 million, with the Government of Bhutan contributing $2 million. It is expected to be completed in July 2023.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.