Nepal, ADB Sign Grant Agreement Of Rs 21.23 Billion For Two Projects

Kathmandu, Dec 11: The government of Nepal and Asian Development Bank (ADB) has signed a concessional loan and grant agreement of 157 million US dollar (approximately Rs 21.23 billion) for the implementation of the Mechanized Irrigation Innovation Project (MIIP) and the Climate Resilient Landscapes and Livelihoods Project (CRLLP).

As per the agreement signed at the Finance Ministry on Wednesday, the grant agreement amounting to 15 million US dollar and Loan Agreement amounting to 110 million US dollar for the implementation of MIIP was signed by DR Ram Prasad Ghimire, Finance Secretary, and Arnaud Cauchois, Country Director of the Nepal Resident Mission, ADB, on the behalf of the government of Nepal and ADB respectively. It was shared in a press statement issued by the Finance Ministry on Wednesday.

The MIIP will introduce advanced irrigation technologies, including a prepaid card system allowing framers to access water based on their field's need. The project will be enforced in the Rautahat and Sarlahi districts of Madhes Province, benefitting over 121,000 farmers.

The primary objectives of the project are to improve agricultural productivity, ensure year-round irrigation and contribute to food security. Additionally, this project will adopt Design, Build and Operate (DBO) modality and establish an irrigation management company for the long-term sustainability of groundwater irrigation system in the region.

Similarly, the grant amounting to 22 million US dollar and Loan Agreement amounting to 10 million US dollar for the implementation of CRLLP was signed by Dhani Ram Sharma, Joint-Secretary at Ministry of Finance and Arnaud Cauchois, Country Director of Nepal Resident Mission, ADB.

The CRLLP stresses enhancement of climate resilient rural communities in the Karnali and Sudurpaschim provinces, which are highly vulnerable to the impacts of climate change. The project is aimed at addressing water insecurity, promoting nature-based livelihoods and empowering local communities through the sustainable management of water resources. The project further stresses empowerment of communities to adapt to climate challenges by forstering sustainable water management, agroforestry, silviculture and forest management.

This project will play a crucial role in improving water security by addressing the region's vulnerability to climate-induced challenges.

On the occasion, Finance Secretary Ghimire expressed his gratitude to ADB for its continued support and partnership. He emphasized that these projects would not only enhance irrigation infrastructure but also spur climate resilience among some of Nepal's most vulnerable communities.

Similarly, Country Director of ADB, Cauchois underlined the key features of these projects, the financing modalities and their importance to Nepal's economy, reaffirming ADB's commitment to supporting Nepal's development goals—particularly in the areas of climate adaptation, agricultural productivity and water security.