ADB Approves Loan to Improve Transport Connectivity in Nepal

ADB Approves Loan to Improve Transport Connectivity in Nepal

The FINANCIAL -- The Asian Development Bank (ADB) has approved a $186.80 million loan to upgrade 160 kilometers (km) of Nepal’s strategic road network and improve the country’s domestic and regional transport connectivity.

“This project supports the government’s plans to further develop Nepal’s infrastructure and connectivity within and outside the country,” Lee Ming Tai, Senior Transport Specialist at ADB’s South Asia Regional Department, said. “These road improvements will help 673,000 people in the Terai area have better access to schools, hospitals, jobs, as well as local and international markets.”

Roads carry about 90% of overall passenger and goods in the country. But the land-locked nation also has the lowest road density among South Asian countries with only 14 km of road per 100 square km and 0.90 km per 1,000 people. This poor connectivity increases transport costs, limits people’s access to jobs and social services, impedes trade with neighboring countries, and undermines the development of competitive industries in Nepal, including high-value agriculture, agro-processing and manufacturing.

The project will upgrade a section of the strategic East-West highway — the main arterial road cutting across the entire width of the country in the southern Terai area — and a key feeder road. These critical sections are the 115 km road network running from Narayanghat to Butwal, and the 45 km feeder road from Bhairahawa to Taulihawa, according to ADB.

The road improvements will also incorporate flood control and drainage designs in anticipation of more frequent and intense rainfalls in the area as a result of climate change. The project will contribute to ADB’s commitment to increase climate finance by approximately $66.5 million. The project roads are located in Nepal’s tropical climate zone which experiences heavy rainfall from June to September.

Road safety is a key element of the project as road traffic accidents in the country continue to rise due to an increase in vehicle numbers and poor road conditions. The new road sections will have service lanes to segregate slow-moving local traffic from fast-moving through traffic, pedestrian-friendly features like walkways on both sides of the roads in settlement areas, pedestrian crossings and road accident emergency response systems at critical locations.

The project will include a five-year performance-based maintenance clause in the contracts with the view of tapping the private sector for maintenance contracts in the future. In this regard, ADB is providing a separate technical assistance to the country’s Department of Roads, the project’s implementing agency, to modernize road asset management and support the implementation of performance-based maintenance contracts.

The total cost of the project is $256.50 million, with the government contributing $69.70 million. The estimated completion date is in early 2022.




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