Agreements signed to ensure quality drinking water and to facilitate the process of loan recovery in Nepal

Town Development Funds (TDF), an autonomous financing institution established by the Government of Nepal, has signed various loan and financial agreements with consumer organizations and local governments across the country to provide access to quality drinking water and to facilitate the process of loan recovery.

Signed between 27 January and 1 February, these contracts are part of the Asian Development Bank (ADB) supported Third Small Towns Water Supply and Sanitation Sector Project, a third stage project that targets infrastructure improvements in 26 towns across the country.

Aiming to provide drinking water to consumers in a well-ordered way and to facilitate the process of loan recovery, on 1 February TDF and the Duhabi Small Urban Drinking Water and Sanitation Consumer Organization signed a loan agreement valued at US$18,347. Signed by Krishna Prasad Sapkota, Executive Director of TDF, and Tej Narayan Prasad Rauniyar, Chairman of the Consumer Organization, this contract aims to minimize the technical problems experienced in the Small Drinking Water and Sanitation Project that operates in different wards of the Duhabi municipality of the Sunsari district in Province 2 of Nepal.

Expressing commitment to continuing to support the project in a sustainable manner, TDF Executive Director Sapkota said, “The leadership of the consumer organization is playing an important role in making the project a success by resolving various problems noticed in the drinking water and sanitation project.” Similarly, praising the support extended by the TDF for the successful implementation of the drinking water and sanitation project, the Chairman of the Consumer Organization Rauniyar said that the upgrading of drinking water pipelines would ensure easy access to quality drinking water.

On 1 February, the TDF also signed a financial agreement valued at US$8.1 million for the construction, operation, and management of the Dadhikot Comprehensive Drinking Water and Sanitation Project (DCDWSP). This contract, which falls under the Urban Drinking Water and Sanitation Project achieved with financial assistance from the ADB, was signed between Vasudev Thapa, Mayor of the Surabinayak Municipality in Bhaktapur district, Ram Kumar Shrestha, Director of the Urban Drinking Water and Sanitation Project Management Office, Krishna Prasad Sapkota, Executive Director of the TDF and Anil Kumar Shrestha, Chairman of the Dadhikot Drinking Water and Sanitation Consumers Association.

According to the agreement, 70% of the costs of the DCDWSP project will be borne by the Government of Nepal as a grant, 25% from the loan offered by the TDF and the remaining 5% would be contributed by those consumers benefitting from the project of whom there will be a total of 49,194 from 3,598 households in all parts of ward number 4 and some parts of ward number 1 of the Suryabinayak municipality

A similar loan agreement valued at US$39,442 was established on 31 January between the TDF and the Birtamod Small Urban Drinking Water and Sanitation Consumer Organization of Jhapa district in province 1. This contract aims to minimize technical problems and to facilitate the loan recovery process. The contract was signed by TDF Executive Director Sapkota and Jan Kumar Gurung, Chairman of the Consumer Organization.

Another loan agreement valued at US$62,759 was signed on 27 January by TDF Executive Director Sapkota and Keshar Prasad Nirdoshi, Chairman of the Puni Urban Drinking Water and Sanitation Consumer Organization in Gandaki Province. TDF also agreed to a loan of 25% of the additional cost of US$251,037 which was due to variations and price adjustments for the project with 70% of this extra cost being borne by the Government of Nepal and 5% by the Consumer Organization.

Established in 1989, the TDF is the only autonomous financial intermediary institution in the country currently providing debt financing to local governments. Donor agencies such as the ADB, the World Bank, the GiZ, and the KfW have worked with TDF since its inception. TDF finances long-term urban infrastructure development projects through its loan and grant funding to municipalities and fast-growing emerging towns.