Project Result / Case Study

Mid-size Cities, Urban Municipalities are Nepal’s New Engines of Growth

ADB's Secondary Towns Integrated Urban Environmental Improvement Project improved the quality of life in Nepal's three key regional centers - Biratnagar, Birgunj and Butwal municipalities.

March 2022

New road construction works from Pani Tanki to Puspal Chowk section, Biratnagar Metopolitan City Ward no. 1 and 3 Boarder Road, Biratnagar. Photo: Biratnagar, Project Implementation Unit, STIUEIP.

The urban planning discipline does not operate in a vacuum. Its problems tend to have multiple causes and potential solutions are multi-faceted. Urban planners embrace it as a holistic concept but also understand its myriad of interdependencies.

Nepal is a country that has shown the stamina to keep up with urban development projects and similar patience for appreciating an urban blueprint’s many intertwined and moving parts. This probably reflects its determination to confront the many challenges of sustainable growth. The government, for example, knew it was important to develop regional urban centers outside the capital as new focal points of growth. Its secondary hubs however were lacking inadequate infrastructure. Their urban amenities— from roads and water supply systems to wastewater to stormwater collection chambers— were under heavy stress from a fast-growing population and economy. Inadequate infrastructure is a major bottleneck that ultimately constrains growth. Nepal had to break out of this counterproductive cycle.

Recognizing the role of its mid-size cities and urban municipalities as engines of growth, Nepal sought to make them stronger and more resilient. In 2010, it launched the Secondary Towns Integrated Urban Environmental Improvement Project (STIUEIP), a coherent strategy to achieve inclusive and sustainable development. The project was implemented in the three sub-metropolitan cities of Biratnagar, Birgunj, and Butwal and in three municipalities of the Kavre Valley district—Banepa, Dhulikhel and Panauti—with assistance from the Asian Development Bank. A loan agreement between ADB and the Nepal government provided $60 million complemented with a $17 million loan from OPEC Fund, to finance sub-projects that can raise the quality of life and provide better and affordable municipal services.

Photo reflecting the after project scenario of new road construction works. Photo: Biratnagar, Project Implementation Unit, STIUEIP.

By 2020, among the sub-projects completed were roads sewerage, drainage, and solid waste management facilities.   STIUEIP invested in smaller community facilities as well and advocated for healthy living, hygiene and eco-friendly 3R practices (reduce, reuse, recycle). It also helped upgrade the government sector’s capabilities to deliver basic services more effectively.

Through the construction of wastewater treatment facilities,   the project ensured no major waterlogging in the core municipal area of Biratnagar and Birgunj complementing the new water reservoirs and pipelines. They would prevent the pollution of rivers and contain the spread of water-borne diseases due to ineffective sanitation, poor hygiene, and dirty floodwaters. Drainages and waterways, on the other hand, were dredged, desilted, and maintained regularly to protect low-lying areas from destructive floods during rainy season. Better-designed sewerage and drainage systems reduced water damage that caused considerable shrinkage and cracks in roads and pavements.

The project addressed the improper disposal of garbage, which can also clog waterways and worsen flooding. By disseminating best practices at household level, communities learned the environmental way of handling solid waste. Modern solid waste management technologies can even produce electricity or gas, but households and establishments had to be reminded first to sort and segregate waste properly at the source. Sanitary landfills were built to high environmental standards to minimize pollution and lessen emissions of methane gas, a dangerous landfill byproduct that aggravates global warming.

The widening of road lanes helped ease traffic gridlock, improved air quality, reduced fuel consumption, and allowed emergency units to respond faster. Better transport infrastructure not only enhanced mobility but supported industries and critical value chains along their path, as well. Reliable transport links will upgrade connectivity and allow intra-regional trade and commerce to flourish. Faster travel to other cities lowers the cost of doing business and helps Nepal boost its global and domestic markets.

Tasked with delivering high-priority urban infrastructure and facilities, the ADB-financed project found stakeholders who shared the vision to create a living environment where residents can enjoy, keep healthy, and be able to withstand to the wrath of nature. Community members were encouraged to define their resiliency priorities.

Sewer manhole installation at Amar Tole, ward no. 8, Biratnagar Metropolitan City. Photo: Biratnagar, Project Implementation Unit, STIUEIP.

"We started a conversation with the community from the very beginning. Their participation in the infrastructure development process was important to us," said ADB project officer Naresh Giri. Because stakeholders were actively involved in a transparent project development process that was opened to diverse views, the project did not always obtain a buy-in from local citizens for infrastructure solutions they did not perceive as urgent or practical.

  The STIUEIP improved the quality of life in three key regional centers of Nepal while some sub-projects that were unacceptable to the community did not push through. Nonetheless, those that were completed represent the aspirations of Nepali citizens to live in progressive, sustainable, equitable and resilient communities.

The stakeholders made it clear that allowing their urban environment to deteriorate was not an option. "All the sustainable infrastructure and facilities that were built are considered long-term investments that will bring a better quality of life and a significant boost to the local economy," ADB team member Sunila Ghimire added.

Infrastructure investments are also expected to promote jobs that help the local economy. Conversely, the entry of new businesses and residential projects can be delayed by sporadic infrastructure planning and uncoordinated urban strategies.

Nepal knows of the high price it could pay in the future if urban facilities fail to keep up with the growth of cities. It is now trying to leave behind a legacy of building only resilient and sustainable infrastructure for the future generations to be able to enjoy a superior quality of life.


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