Bhutan: Phuentsholing Township Development Project - Additional Financing

Sovereign Project | 50165-003

The Phuentsholing Township Development Project will develop 66 hectares (ha) of riparian land near the city of Phuentsholing, located adjacent to the Amochhu River on Bhutan's southwestern border with India. The project will provide protection from floods and erosion and construct smart urban infrastructure to allow phased urban expansion. The additional financing will continue funding the ongoing activities until their successful completion, which is targeted for 2025. These climate-resilient infrastructures will ensure safe and sustainable expansion of human settlement and commercial activities in the area.

Project Details

  • Project Officer
    Norbu, Tshewang
    South Asia Department
    Request for information
  • Approval Date
    27 November 2020
  • Country
    Bhutan
  • Sector
    • Water and other urban infrastructure and services
Project Name Phuentsholing Township Development Project - Additional Financing
Project Number 50165-003
Country Bhutan
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0765-BHU: Phuentsholing Township Development Project - Additional Financing
concessional ordinary capital resources lending / Asian Development Fund US$ 10.00 million
Loan 4019-BHU: Phuentsholing Township Development Project - Additional Financing
concessional ordinary capital resources lending / Asian Development Fund US$ 18.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Sector / Subsector

Water and other urban infrastructure and services / Other urban services - Urban flood protection - Urban sanitation - Urban sewerage - Urban solid waste management - Urban water supply

Gender Equity and Mainstreaming Some gender elements
Description The Phuentsholing Township Development Project will develop 66 hectares (ha) of riparian land near the city of Phuentsholing, located adjacent to the Amochhu River on Bhutan's southwestern border with India. The project will provide protection from floods and erosion and construct smart urban infrastructure to allow phased urban expansion. The additional financing will continue funding the ongoing activities until their successful completion, which is targeted for 2025. These climate-resilient infrastructures will ensure safe and sustainable expansion of human settlement and commercial activities in the area.
Project Rationale and Linkage to Country/Regional Strategy Bhutan is a mountainous country with limited suitable land for urban growth. Phuentsholing is the country''s largest commercial and industrial hub and serves as Bhutan''s strategic trading gateway. It is the country''s second most populous city and is anticipated to grow by 5% per annum. Phuentsholing has reached its current limit for expansion due to being confined by steep terrain and close proximity to the Amochhu River. The project will be a part of efforts to develop Phuentsholing into becoming a regional growth center and main trading gateway, facilitating its economic development. By constructing flood and riverbank erosion protection measures, such as river walls, raising land, and installing an flood early warning system, Phuentsholing city and the new urban areas will have improved resilience to flooding.
Impact

Balanced and sustainable development of human settlements ensured (Eleventh Five Year Plan, 2014 2018)

Smart growth principles applied in planning and development (Phuentsholing Structure Plan 2013 2028)

Project Outcome
Description of Outcome Phuentsholing's urban area protected from floods and expanded with improved amenities and services
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Flood and erosion protection measures installed

Municipal infrastructure constructed

Township management systems installed

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Phuentsholing
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

Environment. The ongoing project will remain category A for environment. The additional financing will be C for environment as the project will have no significant adverse environmental impacts as it covers cost overruns. The existing environmental management plan will be updated to include 360m of extended length of the Omchhu river protection wall. Since majority of the additional financing funds will be used for covering cost overruns and the scope of river wall extension works are minor, no significant adverse environmental impacts are anticipated. Therefore, no changes to the ongoing project environmental impact assessment will be required.

PMU is satisfactorily implementing all safeguards requirements, and any safeguard implementation issues arising during implementation are being addressed effectively. PMU submits environmental safeguard monitoring reports to ADB and these are reviewed and disclosed in accordance with ADB's SPS. The inputs of the safeguard and environmental specialists in project implementation consultancy will continue to (i) build capacity of the PMU, PIU and relevant stakeholders; and (ii) ensure that the project is implemented in accordance with social and environmental safeguard requirements, and monitor safeguard compliance. An independent environmental monitoring expert will continue to provide technical support to PIU, PIC, and PMU during project implementation and document the progress of the EMP and project compliance to the SPS and Environmental Clearance from the National Environment Commission.

Involuntary Resettlement Involuntary resettlement (category C) and Indigenous peoples (category C). The ongoing project will remain category C for involuntary resettlement and category C for indigenous people. The additional financing is also classified as C for involuntary resettlement and category C for indigenous people in compliance with ADB's Safeguard Policy Statement, 2009 (SPS). There are no indigenous people that live in the project site and no land acquisition is envisaged for the additional financing. Social safeguards measures will be achieved in line with the provisions stated in the PAM (footnote 16) and no land acquisition and resettlement plan, or indigenous peoples plan will be required.
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Advance contracting and retroactive financing of civil works and consulting services. Retroactive financing will be considered for eligible expenditures not exceeding 20% of the loan and grant amounts incurred prior to effectiveness, but not earlier than 12 months before the loan and grant agreements are signed.
Procurement

All procurement and recruitment of consultants to be financed by the ADB loan and grant will be carried out in accordance with the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). The procurement capacity assessment concluded that the project's overall procurement risk is moderate. Procurement specialists will help the CDCL prepare and evaluate bids. Funds will be allocated under the project to provide procurement training to the implementing agency and local contractors.

ADB's Anticorruption Policy (1998, as amended to date) was explained to and discussed with the government and DHI and CDCL. The specific policy requirements and supplementary measures are described in the project administration manual.

Responsible ADB Officer Norbu, Tshewang
Responsible ADB Department South Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SARD
Executing Agencies
Department of Macroeconomic Affairs, Ministry of Finance
Tashichho Dzong, Post Box No. 117
Druk Holding and Investments Limited
[email protected]
Thori Lam Upper Motithang
Thimphu, Bhutan
Timetable
Concept Clearance 08 Jun 2020
Fact Finding 09 Jun 2020 to 16 Jun 2020
MRM 31 Aug 2020
Approval 27 Nov 2020
Last Review Mission -
Last PDS Update 02 Dec 2020

Grant 0765-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2020 - - 31 Dec 2025 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 27 Nov 2020 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2020 0.00 0.00 0%

Loan 4019-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2020 - - 31 Dec 2025 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.00 Cumulative Contract Awards
ADB 18.50 27 Nov 2020 0.00 0.00 0%
Counterpart 1.50 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2020 0.00 0.00 0%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

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Contracts Awarded

No contracts awarded for this project were found