Nepal | June 26, 2019

AIIB team to visit next month to discuss proposed projects

Himalayan News Service

Kathmandu, October 17

A delegation of Asian Infrastructure Investment Bank (AIIB) is scheduled to visit Nepal from November 1 to 4 to discuss and look at the projects proposed by the country for financing from the recently established China-backed multilateral bank.

The government has proposed five projects — one urban infrastructure development and two roads and two energy-related projects — to the AIIB.

Prem Upadhyay, under secretary at the International Economic Cooperation Coordination Division under the Ministry of Finance, confirmed that AIIB team will hold discussions with National Planning Commission, Ministry of Finance and the concerned ministries and departments of the proposed projects before visiting some of the proposed project areas.

Loan agreement for the proposed projects will be signed after the AIIB approves the project for financing.

Among the five projects proposed to AIIB, the review team of the AIIB has sought supporting documents for the proposed Urban Infrastructure Improvement Project (UIIP) from the Ministry of Urban Development. The Department of Urban Development and Building Construction under the Ministry of Urban Development is the implementing agency of the project.

According to Padma Kumar Mainalee, deputy director general of the Department of Urban Development and Building Construction and focal point of the UIIP project, the delegation will hold discussions with various stakeholder government entities and is also scheduled to visit the project areas.

Under the project, the government will develop the entire required city infrastructure like, drinking water, sewerage and sanitation, street lights, bus parks, fun parks, improved roads, planned settlements, market centres, educational and health institutions and other facilities.

The project will cover all the district headquarters of the Tarai except for Dang and Chitwan. The municipalities where district headquarters are located — Bhadrapur, Janakpurdham, Birgunj, Rajbiraj, Dhangadhi, Nepalgunj, Mahendranagar, Biratnagar, Jaleshwor, Gaur, Lahan, Taulihawa, Inaruwa, Malangawa, Gularia, Siddharthanagar, Kalaiya and Parasi — will benefit from the project.

The government has set a target to conclude the project, estimated to cost around $560 million, within five years.

The government had approached AIIB for loan assistance of $280 million, according to the Ministry of Finance. Negotiations for the assistance will begin after the AIIB board approves the project. The AIIB delegation will submit Nepal’s proposal to the concerned authority after examining the feasibility and bankability of the project, according to officials.

The government has allocated budget worth Rs 9.54 billion under the heading of ‘intensive urban infrastructure development project’ in this fiscal. The project will map entire required facilities in 18 district headquarters of Tarai to develop them into well-facilitated cities and lay the groundwork for pre-construction phase.

As the country has been moving towards rapid urbanisation, the government has designed the project to develop district headquarters of Tarai as model cities. Currently, over 42 per cent of the country’s population resides in 217 municipalities.

Apart from UIIP, the government has proposed two road projects. One is Pokhara-Beni-Jomsom road, which connects the Chinese border at Korala of Mustang and has also been identified as part of the strategic road network. Another project is upgradation of Samakhusi-Tokha-Chhahare road section.

The government has also proposed two energy-related projects. One is 93-megawatt Sharada-Babai Hydropower Project located in Dang and Salyan districts. Another energy project, Nepal Distribution System Upgrading and Extension Project, aims to make distribution system of Nepal Electricity Authority more effective and efficient.

A version of this article appears in print on October 18, 2016 of The Himalayan Times.

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