IUDP is being implemented by loan assistance from the Asian Development Bank (ADB) in the areas of Water Supply, Solid Waste Management Improvement, Storm Water Drainage and Lane Road Improvement works in Nepalgunj, Sidharthanagar, Dharan and Janakpur municipalities.
The main objective of IUDP is to establish a functional system in project municipalities for improving and delivering affordable municipal infrastructure and services with expanded outreach and inclusiveness by accountable project municipalities. Nepalgunj, Siddarthanagar and Janakpur are implementing solid waste management, storm water drainage and road improvement sub-projects where as Dharan is implementing water supply sub-project. Financing Modality MoF and ADB signed financial agreement on May 8, 2012 to initiate IUDP in Nepalgunj, Siddharthanagar, Janakpur, and Dharan municipalities of Nepal for a total amount of SDR 28,435,000 as loan and USD 12,000,000 as grant to GoN. TDF signed subsidiary loan agreement with MoF to mobilize the loan component of about SDR 8,594,000.Different financing modality has been adopted according to the scope of project and affordability of people and municipality for sustainable infrastructure investment. Accordingly,for the projects like solid waste, drainage, urban road and lanes; 80% grant has been provided by GoN, 15% loan from TDF at the interest rate of 5% with grace period of 5 years and 15 years of loan payback period. Where remaining 5% will be contribution from municipality. Similarly for water supply projects, 50% grant has been provided by GoN, 35% loan from TDF and remaining 15% contribution by municipalities.
Status of the Project
TDF has approved for the loan NPR 1,170.01 million for 6 projects and disbursed about NPR 1073.69 Million. As per the financing agreement, project period has been completed at December end 2020.