Municipal Finance and Capacity Building (MFCB) Programme Status

Last Update: March 1, 2022
Start Date: 1 Feb 2019	Expected completion date: 31 January 2023
Total Activities: 49	Completed Activities: 5

 

 

The Project was designed and implemented to address key issues related to Nepal’s rapid urbanization. In particular, the rapid growth of small towns has far outstripped the capacity of their water supply and sanitation (WSS) infrastructure and services. In 2001, ADB initially supported the government’s efforts to address these issues through a first Small Towns Water Supply and Sanitation Sector Project. This follow-up project aimed for improved, affordable and sustainable water supply and sanitation services that are governed and managed by locally accountable representative bodies. The project had three expected outputs: (i) efficient, effective, and accountable urban water supply and sanitation sector developed; (ii) safe, accessible, and adequate water supply and sanitation facilities developed in 20 towns; and adequate water supply and ...

The Third Small Towns Water Supply and Sanitation Sector Project is designed for key outcomes namely a) the improved the water supply service infrastructure and b) strengthened sector policy, regulatory and institutional capacity and service. For this Project, the Financial agreement (Loan No : 3157 – Nep ( SF)  had  between GoN and ADB dated 24 November 2014. Based on the financing agreement, Subsidiary Loan Agreement (SLA) signed with TDF dated February 11, 2015. It has allocated US$ 18 million loan for financing through TDF out of total SDR 38.92 million. Under this projects, TDF has been appraised and signed loan agreement for the 20 projects to the WSUCs as per the set out lending terms and conditions in the SLA. In addition to under this project, additional enhancement 12 projects (of the total  STWSSSP I/STWSSSP II/STWSSSP III) have been approved . For them loan was approved NPR 1,798.4 million and disbursed NPR  1,390.32 million out of total agreed amount to 20 towns and 12 new enhancement project under STWSSSP III. Whereas 19 projects implementing on second stage (operation and maintenance by the contractor for one year) and 1 project is still under constriction stage.

In line with the GoN’s 15-Year Development Plan (first prepare¬¬¬d in 2009 and updated in 2015) for Water Supply and Sanitation in Small Towns, Asian Development Bank (ADB) has been supporting the Government of Nepal in enhancing water and sanitation services in small towns since 2001. The Government of Nepal has been providing water supply and sanitation services in 70 small towns basically through co-financing model. The small towns are defined as towns that have (i) a population of 5,000 to 40,000, and (ii) perennial access to roads, grid power, and telecommunications i.e. potential for growth. Population concentration in most of these towns are caused by the rapid population growth in urban centers along major highways due to rural to urban migration. These towns were important links with rural areas acting as markets, transport depots and agricultural processing centers. However, basic services such as WSS were inadequate in these towns. The first small town project was completed in 2009, STWSSSP II completed in December 2017 and follow-up third phase-STWSSSP III sub projects are on-going and nearing to completion.

The main concept of the Town Development Programme (TDP) is to expand TDF as an efficient and sustainable financing institution for development of municipal infrastructures. The funds under TDPs were to be exclusively used to finance the local costs of communal infrastructure projects and income generating projects, such as Bus Park, Shopping Complex, Vegetable Market, Multipurpose Building complex, Parks etc, including the local level planning and construction supervision. Project Area: 58 municipalities: (Biratnagar, Nepalgunj, Birgunj,Butwal, Ramgram, Guleria, Bheemdatt,Mechinagar, Butwal, Malangawa, Lekhnath, Kalaiya, Siraha, Lahan, Walling, Putalibazar, Gaur, Rajbiraj, Dharan and Itahari ).