In line with the GoN’s 15-Year Development Plan (first prepare¬¬¬d in 2009 and updated in 2015) for Water Supply and Sanitation in Small Towns, Asian Development Bank (ADB) has been supporting the Government of Nepal in enhancing water and sanitation services in small towns since 2001. The Government of Nepal has been providing water supply and sanitation services in 70 small towns basically through co-financing model. The small towns are defined as towns that have (i) a population of 5,000 to 40,000, and (ii) perennial access to roads, grid power, and telecommunications i.e. potential for growth. Population concentration in most of these towns are caused by the rapid population growth in urban centers along major highways due to rural to urban migration. These towns were important links with rural areas acting as markets, transport depots and agricultural processing centers. However, basic services such as WSS were inadequate in these towns. The first small town project was completed in 2009, STWSSSP II completed in December 2017 and follow-up third phase-STWSSSP III sub projects are on-going and nearing to completion.

The main concept of the Town Development Programme (TDP) is to expand TDF as an efficient and sustainable financing institution for development of municipal infrastructures. The funds under TDPs were to be exclusively used to finance the local costs of communal infrastructure projects and income generating projects, such as Bus Park, Shopping Complex, Vegetable Market, Multipurpose Building complex, Parks etc, including the local level planning and construction supervision. Project Area: 58 municipalities: (Biratnagar, Nepalgunj, Birgunj,Butwal, Ramgram, Guleria, Bheemdatt,Mechinagar, Butwal, Malangawa, Lekhnath, Kalaiya, Siraha, Lahan, Walling, Putalibazar, Gaur, Rajbiraj, Dharan and Itahari ).