Kathmandu Valley Water Sector Reform Program (Subprogram 1) (ADB-57058-002)

Regions
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • Nepal
Geographic location where the impacts of the investment may be experienced.
Specific Location
Kathmandu
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
Government of Nepal - Ministry of Water Supply
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Infrastructure
  • Water and Sanitation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Grant, Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Loan Amount (USD)
$ 50.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Grant Amount (USD)
$ 0.75 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 50.75 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Other Related Projects
Primary Source

Original disclosure @ ADB website

Updated in EWS Mar 8, 2026

Disclosed by Bank Dec 19, 2025

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the proposed Kathmandu Valley Water Sector Reform Program aims to support the Government of Nepal in enhancing operational efficiency and climate resilience, improving service delivery and governance systems, and strengthening institutional capacity and financial sustainability of water supply and sewerage (WSS) entities in the Kathmandu Valley. Anchored in the Water Supply and Sanitation Act, 2022 and the National Water Supply and Sanitation Policy, 2023, the proposed program promotes universal access to quality equitable and sustainable WSS services.

A programmatic approach under a policy-based loan with two subprograms (of $50.00 million each), from January 2025–June 2026 and from July 2026–June 2028, is proposed to sustain reforms to drive lasting sector-wide transformation, with demonstrated ownership and consistent commitment from the government. The program will enable the government to structure, prioritize, and sequence sectoral reforms and incentivize implementation by translating impactful reforms into implementable policy actions. It will foster operational capabilities of the Kathmandu Valley’s WSS entities to manage new WSS assets and to benchmark themselves against similar, well-functioning water sector agencies internationally. Subprogram 1 will undertake policy reforms in governance, financial, and operational aspects, including pilot initiatives; subprogram 2 will expand, implement, and institutionalize policy actions.

The Technical Assistance Strengthening Institutional Capacities of Water Supply Agencies in the Kathmandu Valley will provide advisory and capacity building support for implementing and monitoring the policy actions of subprogram 1 and for preparing subprogram 2.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

Subprogram 1 is tentatively classified B for environment, and C for Indigenous Peoples and involuntary resettlement, per the ADB Safeguard Policy Statement (2009). This will be confirmed during loan processing and a matrix of potential environmental and social impacts of policy reforms will be prepared.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The financing amount is $50,000,000, which will be financed on a loan basis by ADB’s ordinary capital resources.

Additional funds totaling $750,000 will be sought under the TA, which will be financed on a grant basis by the Technical Assistance Special Fund 8. The government will provide counterpart support in the form of staff, office space, administrative and logistics support, and other in-kind contributions.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.adb.org/forms/request-information-form

ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals

ACCOUNTABILITY MECHANISM OF ADB

The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.

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