ADB Approves $85M Loan to Enhance Irrigation and Agriculture in Nepal
The Asian Development Bank (ADB) approved a loan of $85 million aimed at modernising Nepal's irrigation systems and boosting agricultural output. This ADB Irrigation agriculture Nepal project is expected to bring significant improvements to the sector.
This project, the Irrigation Modernization Enhancement Project, is designed to develop a climate-resilient irrigation framework which is crucial for ADB Irrigation agriculture Nepal initiatives.
It will benefit approximately 56,000 farming households spread across five provinces.
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Despite agriculture contributing 26% of Nepal’s GDP, the sector has seen minimal growth at 2.7% per year. Enhancing ADB Irrigation agriculture Nepal will address these challenges.
This stagnation is primarily due to unreliable irrigation and escalating climate-related issues such as floods, droughts, and heatwaves.
These challenges have deepened food insecurity, underscoring the urgent need for sustainable agricultural practices.
Deepak Bahadur Singh, the ADB Senior Safeguards Officer (Environment) said, “This project will help Nepal modernize its agriculture sector, improve farmers’ incomes, and improve food security.”
He added, “ADB will provide infrastructure development, as well as equipment and machinery; introduce new and climate-smart agriculture practices; and strengthen the capacity of farmers and institutions to boost the sector’s contribution to Nepal’s development.” ADB Irrigation agriculture Nepal initiatives are expected to make a significant impact.
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The Rajapur Irrigation Project will enhance 31,000 hectares of farmland by upgrading 100 farmer-managed irrigation systems.
Key improvements will encompass on-farm irrigation upgrades and enhancements in water management.
Construction of flood-protection embankments, gated regulators, canal under-sluices, and hill-lift irrigation systems equipped with micro-irrigation features will also be included.
These advancements aim to optimize water utilization and enhance resilience to climate-related challenges.
ADB aims to work with farmers and the government to improve crop water management through integrated irrigation, positioning ADB Irrigation agriculture Nepal for success.
The initiative will also focus on creating connections with agribusinesses, developing value chains, and fostering collaboration with private agro-enterprises.
Moreover, the project will support water user associations (WUAs) in obtaining financing for modern agricultural tools and offer digital advisory services to farmers, WUAs, and cooperatives.
These services will deliver timely updates on weather patterns, crop planning, and market developments.
The projected total cost of the project is around $133.64 million. Besides the ADB loan, the Nepali government will invest $16.14 million, with farmers contributing an additional $2.5 million.
The government is also working to secure an extra $30 million through co-financing from a development partner to cover the remaining funding needs.
