The Asian Development Bank (ADB) has provided a grant assistance of US$55.2 million to help expand and reconstruct the feeder road system in Nepal .
Ki Hee Ryu, Officer-in-Charge of ADB in Nepal, and Vidyadhar Mallik, secretary at the Ministry of Finance, signed the agreement to this effect amid a function held at the ministry Monday.
The grant is under the Road Connectivity Sector I Project, which was approved by the bank on August 11 this year.
The expansion of the feeder road system will improve access to market, health, and education centres in rural areas. This is the first time that ADB has provided grant financing to fund an investment project in the country.
The funds come from ADB’s concessional Asian Development Fund (ADF). With a per capita income of US$ 230, Nepal is eligible for ADF grant financing for up to half of its total assistance program for 2006.
The money will be invested for the construction and upgrading of some 490 km feeder roads. This includes the construction of roads connecting the district headquarters that are not currently connected and up-gradation of existing roads in 17 districts.
In addition, Department of Roads will get technical assistance grant of US$300,000 accompanying the project to carry out road feasibility studies and improve road construction and contract management of local construction and consulting services.
The total cost of the project is US$80 million. Organization of Petroleum Exporting Countries (OPEC) Fund for International Development will provide US$10 million loan while the government will contribute US$14.8 million. The project will be completed in 2012.
ADB is one of the major donors of Nepal especially assisting for poverty reduction.