ADB Grant to Improve Road Connections Serving Nepal’s Rural Poor

Manila, Philippines – A US$55.2 million grant from ADB’s concessional Asian Development Fund (ADF) will help expand and rehabilitate the feeder road system in Nepal to improve access to market, jobs, and health and education centers in rural areas.

Poor road connectivity is a major development constraint for the country, and inadequate feeder roads, or access roads, worsen the isolation of remote rural areas, mostly in northern hilly regions.

“Rehabilitating and expanding feeder roads will help promote inclusive social and economic development,” says Nianshan Zhang, an ADB Portfolio Management Specialist.

“Improved access of remote people to social facilities and jobs in major towns will foster a social and economic development process that can lead to a steady decline in poverty.”

The project will construct and upgrade 10 feeder roads and one bridge, to a total of about 490 kilometers, serving poor, isolated people mainly in hilly areas. This covers the construction of new roads to three district headquarters that are currently not connected to the national highway, and the upgrading of existing district roads to all-weather condition in 17 of the country’s 75 districts, affecting about 1.4 million people. The prospective roads are included in the Government’s 10-Year Road Sector Midterm Program.

In addition, a $300,000 technical assistance grant accompanies the project to help the Department of Roads carry out road feasibility studies, and to local construction and consulting services industries in road construction and contract management.

The project is the first new investment to be approved by ADB for Nepal since December 2004, and the country’s first to be financed under ADF grant financing.

The total cost of the project is estimated at $80 million, with the OPEC Fund for International Development providing a $10 million loan to finance civil works. The Government will shoulder the balance of $14.8 million.

The Ministry of Physical Planning and Works is the executing agency for the project, which is due for completion around December 2012.

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