ADB approves revised Nepal loan for Kathmandu water supply

MANILA: The Asian Development Bank said Friday it has agreed to revised terms of a delayed water supply project in Nepal for which the lender is the lead financier.

The project involves boring a 26-kilometre (16-mile) tunnel through a mountain to bring water to 1.5 million residents of the chronically parched Kathmandu valley from the Melamchi river.

The initial project design approved in 2000 called for a 464 million-dollar budget, but this was reduced to 317.3 million dollars under the new design, the Manila lender said in a statement.

The project now "looks set to proceed," it added. ADB would lend 137 million dollars for the project, which is also supported by the Japan Bank for International Cooperation, the Japan International Cooperation Agency, the Nordic Development Fund and the Organization of Petroleum Exporting Countries Fund for International Development.

"While the need to address the water crisis is growing, the changing circumstances surrounding the project required adjustments in scope and implementation arrangements," said Leonardus Boenawan Sondjaja, who heads the administration unit for the project.

The bank agreed to split the project into two components between the tunnel and the water supply and sanitation components. It also lifted a condition requiring the award of a private-sector management contract.
ADB also approved adjustments to two other bank-funded projects that complement the Melamchi project.