Kathmandu: The Asian Development Bank (ADB) has agreed to provide a concessional loan and grant totaling NPR 21.23 billion to Nepal for the implementation of a new advanced irrigation project. The agreement, signed on Wednesday between Nepal’s Ministry of Finance and ADB, will fund the latest mechanical irrigation initiative.

Under the agreement, ADB will provide a grant of USD 15 million (approximately NPR 2 billion) and a loan of USD 110 million (around NPR 14.88 billion). The signing was conducted by Dr. Ram Prasad Ghimire, Secretary of the Ministry of Finance, and Arnoud Cachois, ADB’s Country Manager for Nepal.

The project will enable farmers in the target areas to access advanced irrigation systems through a prepaid card system, allowing them to irrigate their fields based on specific needs. The project will be implemented in the districts of Rautahat and Sarlahi in the Madhesh Province, where over 121,000 farmers are expected to benefit.

The primary objectives of the project are to improve agricultural productivity, ensure year-round irrigation, and contribute to food security. The project will also incorporate underground irrigation systems to ensure long-term sustainability, with plans to establish an irrigation management company to oversee its operations.

In addition, a separate agreement for the Climate-Resilient Rural Infrastructure Project (CLRRIP) was also signed, which aims to enhance climate resilience in rural communities most at risk due to climate change, particularly in the Karnali and Sudurpashchim provinces. The CLRRIP will receive a grant of USD 22 million (about NPR 2.97 billion) and a loan of USD 10 million (around NPR 1.35 billion).