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 (iii) governance and capacity strengthened for project operation and management.
The project was estimated to cost $76.14 million.4 The government secured a grant of $45.10 million from ADB’s Special Funds resources (Asian Development Fund) to support the project. ADB approved the project on 17 September 2009 and the grant became effective on 14
For this Project, the Grant agreement (Grant No. 0157 – Nep ( SF) had between GoN and ADB dated 27 Novermber 2009. Based on the Grant agreement, Subsidiary Loan Agreement (SLA) signed with TDF dated July 11, 20101. It has allocated US$ 17 million loan for financing through TDF out of total USD 45.1 million. Project activities were completed on 31 December 2017 after two extensions, 21 months after the original closing date. The project closed on 18 March 2019.
Financing Modality of STWSSSP II
In the Small Water Supply & Sanitation Sector Projects (STWSSSP II), GoN provides 50% of total project cost as grant and the remaining 50% project cost is shared by users in which, 35-45% comes from TDF as loan and remaining 5% to 15% is contributed by users themselves.
Under the STWSSSP-II, as per the subsidiary loan agreement held with TDF, GoN has allocated $ 17 million loan for financing through TDF. TDF’s loan equivalent to 25-45% of project costs are planned to recover in down to 25 years including 5 years grace period.
TDF has appraised and approved loans equivalent to NPR 2,041.34 million for all 21 projects and disbursed NPR 1,964.22 million.
Output of the Project:
- Efficient, effective, and accountable urban water supply and sanitation sector developed.
- Safe, accessible, and adequate water supply and sanitation facilities developed in 20 towns-Fiddim Shivanagar, Indrapur Damak, Baglung Narayan, Sandhikharka, Karahiya Makrahar, Lamahi, Bhasi, Darakh Sukhad, Byas, Meghauli, karbhitta, Dhankuta, Duhabi, Letang, Rampur, Mukundapur, Baitadi, Khandbari small towns.
- Governance capacity strengthened for project management and operation.