Project Name
Urban Water Supply and Sanitation (Sector) Project
Project Number
Country / Economy
  • Nepal
Project Status
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 3711-NEP: Urban Water Supply and Sanitation (Sector) Project
Source Amount
Concessional ordinary capital resources lending US$ 130.00 million
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
  • Knowledge solutions
  • Partnerships
Sector / Subsector
  • Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban sanitation - Urban water supply

Gender equity theme
ADB has supported the government in improving water supply and sanitation services in 70 of the 176 small towns in Nepal through three small towns projects introducing continuous water supply, meeting national quality standards, and providing universal household connections with subsidized connections and affordable supply for poor and vulnerable households.
Project Rationale and Linkage to Country/Regional Strategy
The Urban Water Supply and Sanitation (Sector) Project will support the ongoing efforts of the Government of Nepal to provide better access to water supply and sanitation services to the growing urban population. Building upon the successful implementation of earlier interventions, the project will fund physical investments in water supply and sanitation infrastructure and non-physical investments to improve service regulation, governance, and user participation in selected municipalities, previously referred to as small towns.

Quality of life for urban population, including the poor and marginalized, improved through the provision of sustainable water supply and sanitation services

Project Outcome

Description of Outcome

Inclusive and sustainable access to water supply and sanitation services in project municipalities achieved

Progress Toward Outcome
Subprojects are at different stages of implementation and expected to ensure achievement of the outcome. 23 (19 water supply, 2 storm water drainage/fecal sludge management, and 2 DEWATS & Sewerage packages) are awarded and under implementation with various level of progress.

Implementation Progress

Description of Project Outputs

Water supply and sanitation infrastructure in project municipalities improved

Institutional and community capacities strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

1a. Status of Water supply infrastructure established or rehabilitated in 20 project municipalities:

(i) 19 Water supply infrastructure established or rehabilitated in 18 Municipalities contracted out of which 5 water supply subproject in Bhojpur, Siddhanath Bhaijnath, Diktel, Liwang and Chainpur has been completed and in operation and maintenance stage.

(ii) 1,553 km water supply pipes installed.

(iii) 19 Water Treatment Plants (WTP) greater than 0.6 MLD in each WTP designed in contracted subprojects.

(iv) 60,114 (base) HHs from 20 proposed subprojects (24,549 connected); 3,989 Subsidized connections from 14 contracted projects (2,246 connected).

(v) Climate and disaster risks factored in design of subprojects activity is ongoing as the design of some water supply projects is still ongoing.

1b. Status of Sanitation infrastructure improved in 20 project municipalities:

(i) Construction of 2,075 toilets through output-based aid for poor and vulnerable households from 14 contracted subprojects (1,862 completed and being used).

(ii) Construction of 16 public toilets that are suitable for both genders as well as the disabled proposed from 14 contracted projects; 9 completed and 2 under construction.

(iii) Two decentralized wastewater treatment plants Charikot DEWATS and Bhojpur DEWATS are under construction.(iv) 43 km of stormwater drainage has been designed for two contracted subprojects out of which 18.92 km has been constructed.

(v) Climate and disaster risks factored in design of subprojects, as necessary i.e. going for deepwells, location at higher grounds, laying pipe under soil, source protection work, free-board increase, increased size, safe drainage route, plantation and bio-engineering works.

2. Status of Institutional and community capacities strengthened are:

2a. WASH Plans for all project Municipality will be integrated with recently developed National WASH (N-WASH). Lacking resources for covering whole municipality coverage. Agreed to prepare for the ward covered by the water supply subproject only. The formulation is ongoing.

2b. 18 WUAs registered and 18 WUSCs formed (out of 20 projects); 19 contracted WSS WUSCs have 39.18 % female members; 19 contracted subproject WUSCs have at least one female members in key position.

2c. Water tariff guideline for TDF and Water Tariff Implementation Guideline for WUSC prepared by TDF. Business plan of 5 from 1st & 2nd phase & 20 from 3rd phase towns prepared.

2d. 19 Climate-Resilient subprojects selected. Five subprojects have been included in UWSSP implementation.

2e. Leadership and GESI in WASH training conducted in all three regions with 89 participants (3 male & 86 female). Training to 200 staff (66 of them women) of DWSS, TDF, project WUAs, and project municipalities reported stronger technical knowledge of smart utility management and leadership will be conducted in Q4 2022.

2f. Awareness campaign on water conservation practices and sustainable hygiene behavior participated by and reached to 86,755 (51.00 %) females of total 170,324 participants through formal/informal campaigns.

Geographical Location

Safeguard Categories

Involuntary Resettlement
Indigenous Peoples

Summary of Environmental and Social Aspects

Environmental Aspects
The project management office (PMO) prepared an environmental assessment review framework (EARF) in accordance with ADB's Safeguard Policy Statement and applicable government environmental regulation to provide guidance on subproject selection, screening and categorization, information disclosure and consultation, assessment, planning, institutional arrangement, and processes to be followed during project implementation. Five sample subprojects were appraised, and initial environmental examination (IEE) reports were prepared in line with ADB's Safeguard Policy Statement and EARF. The IEEs also include an environmental compliance audit of existing facilities that will be rehabilitated or expanded under the project. The sample IEEs and information on project municipalities indicate that there are no ecologically sensitive areas, planned infrastructure will only require small footprints, and the potential impacts are site-specific--few if any of them are irreversible and can in most cases be readily mitigated and minimized by applying proven mitigation measures and environmentally sound engineering and construction practices consistent with international good practices. Stakeholders were involved through meaningful consultations and views expressed were fed into IEEs and subprojects. The consultation process will be continued during project implementation to ensure that stakeholders are fully engaged. The environmental management plans (EMPs) will form part of the bid and contract documents. The IEEs were prepared with site-specific EMPs and monitoring program, submitted to ADB, and no works will start until final IEEs are reviewed and approved by ADB. The EARF and IEEs were disclosed on ADB and project websites and to affected people. A grievance redress mechanism is included in the project administration manual. Adequate consulting support is included in the project to ensure satisfactory environmental compliance. PMO will report to ADB on EMP implementation twice a year.
Involuntary Resettlement
To guide subproject preparation, the PMO prepared a resettlement framework in line with ADB's Safeguard Policy Statement and the Government of Nepal's policies, and a sample resettlement plan and four sample due diligence reports. Private land acquisition for sample subprojects is not needed. The resettlement plan, prepared for a sample WSS subproject, assesses the impact on common property resources and provides suitable mitigation measures The DWSSM has some experience in implementing and monitoring category B subprojects for involuntary resettlement safeguards under ADB-funded projects. The grievance redress mechanism will address issues and grievances in a timely and effective manner. The PMO will submit semiannual social safeguard monitoring reports to ADB and will be supported by loan consultants in monitoring compliance with safeguards. No subprojects rated category A for involuntary resettlement will be included.
Indigenous Peoples
To guide subproject preparation, the PMO prepared an indigenous peoples planning framework in line with ADB's Safeguard Policy statement and the Government of Nepal's policies. Field visits confirmed the presence of indigenous peoples' groups in one of the sample municipalities, who will be included in project benefits. Indigenous peoples' groups who are traditional users of surface water sources proposed for a municipal water supply system are also identified, and a sample indigenous peoples plan was prepared. Previous ADB projects implemented by the DWSS were category C for indigenous peoples' safeguards. Capacity building of PMO staff as well as training of municipal officials and WUAs on indigenous peoples' safeguards, and refresher training sessions on involuntary resettlement will be required. Regional PMOs, municipalities, and WUAs will need capacity support from the social safeguards consultant to asses in the implementation of resettlement and indigenous peoples plans. No subprojects rated category A for indigenous peoples will be included.

Stakeholder Communication, Participation, and Consultation

During Project Design
PMO will submit to ADB a stakeholder communication strategy after one month of the project effectiveness. The strategy will follow ADB's Public Communications Policy 2011. PMO will ensure that all communication is in language understood by the specific audience. The stakeholder communication strategy will be based on a stakeholder analysis and will incorporate the following components:(i) Compilation of stakeholder communication activities undertaken so far, including gender-disaggregated data on participants, minutes of meetings and photographs;(ii) role of the PMO, RPMOs in coordinating and communicating with government of institutional stakeholders;(iii) public communication plan for disseminating project related information (a) to the general public, particularly those who may be impacted by the proposed projects; (b) to indigenous peoples' groups who may be benefited or affected by the proposed projects; (c) to communities facing loss of common property resources; and (d) to vulnerable groups, particularly regarding the project's social inclusion policy and how to avail benefits under the project;(iv) disclosure of social safeguards and environment monitoring reports and any updated resettlement plans and IEEs in the ADB and PMO websites and to affected persons and local non-government organizations/community-based organizations, in local language; and(v) other communication arrangements at the local community level including through notice boards, newspapers, local radio stations and cable television, etc.
During Project Implementation
PMO has already submitted to ADB a stakeholder communication strategy, and is being implemented.

Business Opportunities

Consulting Services
PMO will recruit four consulting firms: one to support project management and quality assurance, and three for design, supervision, and management targeting specific geographical regions. Recruitment will be through quality- and cost-based (90:10) selection to ensure engagement of highly qualified consultants. Individual consultants will be engaged to support the TDF and the DWSS.
Procurement (including consulting services) to be financed by the loan will follow ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time).


Responsible ADB Officer
Paudel, Shiva Prasad
Responsible ADB Department
Sectors Group
Responsible ADB Division
Water and Urban Development Sector Office (SG-WUD)
Executing Agencies
Ministry of Water Supply (formerly Ministry of Water Supply and Sanitation)


Concept Clearance
12 Apr 2018
Fact Finding
23 Apr 2018 to 07 May 2018
10 Jul 2018
26 Sep 2018
Last Review Mission
Last PDS Update
06 Aug 2022


Loan 3711-NEP

Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2018 26 Nov 2018 11 Jan 2019 30 Apr 2024 30 Apr 2025 -
Financing Plan
  Total (Amount in US$ million)
Project Cost 139.00
ADB 130.00
Counterpart 9.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 87.92 0.00 88%
Cumulative Disbursements 06 Jun 2024 73.38 0.00 73%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - Satisfactory - Satisfactory
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