ADB to Help Improve Agricultural Productivity, Irrigation in Nepal

MANILA, PHILIPPINES (1 November 2024) — The Asian Development Bank (ADB) has approved an $85 million loan to support the modernization of irrigation networks and increase agricultural production in Nepal.

Nepal's agriculture sector contributes 26% to the gross domestic product. However, growth has stagnated at 2.7% annually due to unreliable irrigation, while climate-related hazards such as floods, droughts, and heat waves have intensified food insecurity and reduced resilience. 

The Irrigation Modernization Enhancement Project will develop a more efficient and climate-resilient agriculture and irrigation system for about 56,000 farm households across five provinces in Nepal. 

“This project will help Nepal modernize its agriculture sector, improve farmers’ incomes, and improve food security,” said ADB Senior Safeguards Officer (Environment) Deepak Bahadur Singh. “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.”

The project will upgrade more than 31,000 hectares of agricultural command areas covering 100 farmer-managed irrigation systems under the Rajapur Irrigation Project. It will improve on-farm irrigation and water management by constructing gated regulators, river embankments for flood protection, canal under-sluices, and hill-lift irrigation with micro-irrigation systems. 

ADB will build the capacity of farmers and government agencies in integrated crop water management by integrating irrigation management, infrastructure management, and agriculture development. This will help them boost agribusiness, establish value chains, and links to private agro-enterprises.

The project will help water user associations (WUA) to access financing for modern farming machinery and equipment and teach farmers advanced agricultural technologies. It will support the establishment of digital advisory services to provide farmers, WUAs, and water user cooperatives information on weather, seasonal crop planning, and marketing.

The total project cost is $133.64 million. This includes $16.14 million from the government, and $2.5 million from farmer beneficiaries. The government is in the final stages of securing a loan from a development partner to bridge the remaining $30 million funding gap through cofinancing.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.