ADB to Invest $115 Million in Nepal’s Urban Water and Sanitation Infrastructure

Kathmandu — The Asian Development Bank (ADB) has approved a concessional loan of $115 million to improve drinking water supply, sanitation services, and climate resilience in rapidly urbanizing municipalities across Nepal.

The financing will be utilized under the Integrated Water Supply and Sewerage Management (Sector) Project, which aims to expand access to safe water and sanitation facilities for more than 850,000 people living in 13 municipalities. The initiative is expected to address growing pressure on urban infrastructure caused by population growth and rapid urban expansion.

According to ADB, the project will significantly upgrade water supply systems through the construction of around 64 tube wells, water treatment facilities with a combined production capacity of approximately 60 million liters per day, and more than 2,100 kilometers of water distribution pipelines. As part of the expansion, about 72,000 households—including vulnerable and women-headed families—will receive pressurized piped water connections.

ADB Country Director for Nepal, Arnaud Cauchois, said the project is designed to strengthen access to reliable urban services while helping municipalities cope with natural hazards and climate-related risks. He noted that improved water and sanitation systems would contribute to healthier, more sustainable, and economically vibrant urban centers.

The project also includes major investments in sanitation infrastructure. Sewerage and drainage networks will be upgraded in selected municipalities, while wastewater treatment plants and fecal sludge treatment facilities will be newly constructed or rehabilitated. More than 120,000 properties are expected to benefit from improved sanitation services.

Climate adaptation and mitigation have been incorporated into the project design, with dedicated funding of $75.27 million allocated for resilience-related measures. ADB estimates that the project will reduce greenhouse gas emissions by more than 22,000 tons of carbon dioxide equivalent annually.

In addition to physical infrastructure, the program will support institutional strengthening at the municipal level. Participating local governments will receive assistance in areas such as asset management, financial sustainability, digital service systems, and public awareness campaigns related to hygiene and disaster preparedness.

The project aligns with Nepal’s national development priorities under the Sixteenth Plan and supports broader efforts to improve urban service delivery and wastewater management. It also forms part of ADB’s ongoing partnership with Nepal to promote sustainable and climate-resilient urban development.

The total project cost has been estimated at $143.8 million, with the Government of Nepal contributing $28.8 million in counterpart funding. Implementation will be led by the Ministry of Infrastructure Development, with technical support from the Department of Water Supply and Sewerage Management and participating municipalities.

The project is scheduled to be completed by June 2032.