Asian Development Bank ADB agreed to provide US$ 150 million equivalent to 16.92 billion rupees as development assistance for two projects.
Finance Secretary Rajan Khanal and Country Director Mukhtor Khamudkhanov signed loan agreements for 2 separate projects aimed a function in Ministry of Finance.
The projects include a $20 million loan to South Asia Subregional Economic Cooperation Power System Expansion Project Additional Financing, to support the transmission and distribution subprojects, and a $130 million loan for the Urban Water Supply and Sanitation Sector Project to improve access to community-managed water supply and sanitation in 20 urban municipalities of Nepal.
Under South Asia Subregional Economic Cooperation Power System Expansion Project-Additional Financing, ADB assisted the Government of Nepal in increasing capacity of national power grid and enhancing renewable energy development.
According to ADB, the South Asia Subregional Economic Cooperation Power System Expansion Project is building more than 200 kilometers of power transmission lines, as well as substations, along Kali Gandaki corridor in the Himalayas and Marsyangdi-Kathmandu route.
The project is also building or upgrading more than 1,000 kilometers of power distribution lines in the east, central, and west regions of the country. To bring affordable renewable energy to remote areas, the project is building small hydroelectric power plants, as well as mini-grid based solar and solar/wind hybrid energy systems.
The Government of Nepal has requested a loan of $20 million from ADB's concessional ordinary capital resources to cover a shortfall resulting from a change in financing arrangement from one of the cofinanciers of the current Nepal: South Asia Subregional Economic Cooperation (SASEC) Power System Expansion Project.
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.
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.
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.
According to a press release issued by Ministry of Finance, the government of Nepal has expressed its sincere appreciation to the Asian Development Bank for the loan and grant assistance and for continued support in the socio-economic development of Nepal.