ADB Approves $85 Million Loan for Irrigation Modernization in Nepal
The Asian Development Bank (ADB) has approved an $85 million loan aimed at modernizing irrigation networks and boosting agricultural production in Nepal.
The funding will support the Irrigation Modernisation Enhancement Project, which is designed to create a more efficient and climate-resilient agricultural and irrigation system for approximately 56,000 farm households across five provinces, as reported by Xinhua news agency.
Agriculture in Nepal accounts for 26 percent of the country’s gross domestic product, but its growth has stagnated at an annual rate of 2.7 percent, primarily due to unreliable irrigation. Additionally, climate-related challenges such as floods, droughts, and heat waves have exacerbated food insecurity and weakened resilience.
The project aims to enhance over 31,000 hectares of agricultural command areas by upgrading 100 farmer-managed irrigation systems. The total cost of the project is estimated at $133.64 million, with contributions of $16.14 million from the government and $2.5 million from farmer beneficiaries.
The government is currently finalizing arrangements for a loan from a development partner to address the remaining $30 million funding gap through co-financing.
