Nepal: Mechanized Irrigation Innovation Project

Sovereign Project | 52130-001

The project will provide long-term sustainable solutions to increase year-round access to irrigation water in the Terai by constructing a large-scale network of tube wells with dedicated electricity distribution networks. The management, operations, and maintenance (MOM) of the tube well irrigation schemes will be contracted to a third-party operator, tentatively under a design-build-operate (DBO) modality. On-demand irrigation services will be provided to the farmers by the MOM operator against payment through prepaid irrigation systems. Contracting the design, construction, and operation for a period of about 15 years to private sector will provide an incentive for the contractor to design and construct quality and sustainable infrastructure. The project will also provide specific institutional and capacity development support for the water users to develop self-sustained and long-term crop intensification and diversification, and market support services.

Project Details

  • Project Officer
    L'Hostis, Marie
    South Asia Department
    Request for information
  • Country/Economy
    Nepal
  • Sector
    • Agriculture, natural resources and rural development
Project Name Mechanized Irrigation Innovation Project
Project Number 52130-001
Country / Economy Nepal
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant: Mechanized Irrigation Innovation Project
Asian Development Fund US$ 15.00 million
Loan: Mechanized Irrigation Innovation Project
Concessional ordinary capital resources lending US$ 85.00 million
TA: Mechanized Irrigation Innovation Project
Technical Assistance Special Fund US$ 750,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural production - Irrigation

Energy / Electricity transmission and distribution
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will provide long-term sustainable solutions to increase year-round access to irrigation water in the Terai by constructing a large-scale network of tube wells with dedicated electricity distribution networks. The management, operations, and maintenance (MOM) of the tube well irrigation schemes will be contracted to a third-party operator, tentatively under a design-build-operate (DBO) modality. On-demand irrigation services will be provided to the farmers by the MOM operator against payment through prepaid irrigation systems. Contracting the design, construction, and operation for a period of about 15 years to private sector will provide an incentive for the contractor to design and construct quality and sustainable infrastructure. The project will also provide specific institutional and capacity development support for the water users to develop self-sustained and long-term crop intensification and diversification, and market support services. The project area was selected to serve farmers who do not receive surface irrigation water.
Project Rationale and Linkage to Country/Regional Strategy

Most irrigation systems in Nepal are in the Terai plains and provide supplementary irrigation for rice cultivation during the monsoon season. The projected impacts of climate change will increase demand for irrigated water and uncertainty around the reliable supply of water throughout the year. The expansion of irrigated areas and provision of reliable irrigation services during the dry season is constrained because costly investments in storage dams, inter-basin water transfers, and surface irrigation systems are required. Alternatively, year-round irrigation can be achieved by tapping readily available and annually renewable groundwater resources through efficient and sustainable mechanized (pump) irrigation.

Nepal faces increasing difficulty in sustainably financing the management, operation and maintenance (MOM) of irrigation schemes because of: (i) inadequate government financing; (ii) public agencies' lack of knowledge and resources; (iii) weak MOM capacity, inadequate asset inventory and O&M planning; and (iv) poor cost recovery from the water users' associations (WUAs), which have struggled to maintain and operate small irrigation systems well._Hence, continuing business-as-usual approaches to MOM is not sustainable and innovation is required. This includes providing alternative MOM institutional options, including private sector participation. Poor irrigation system performance translates into low crop yields and land productivity and inefficient water management. Low efficiency in irrigation in addition to climate change impacts further constraints water availability for year-round irrigation.

The project supports both technical and institutional innovations. The technical innovation involves designing and constructing a large-scale highly efficient groundwater irrigation system powered by the national grid. The system will be equipped with a prepaid meter system for water fee collection and a sophisticated supervisory control and data acquisition system that will monitor energy consumption, groundwater levels, and water consumption by farmers. ADB will support knowledge sharing from Bangladesh to Nepal where aa similar system and management has proven to be successful._A pilot ground water irrigation scheme has been initiated in Rautahat district._On the institutional side, the project will demonstrate the commercial viability of using a DBO modality to develop and operate tube well irrigation systems and promote to the private sector to upscale the modality to other Terai areas. The limited expertise of DWRI with modern irrigation design and performance-based irrigation management will be substantially enhanced. ADB is also adding value by working with farmers to use precise irrigation methods, diversify their cropping patterns, and strengthen the market value chain.
Impact

Agricultural production and productivity increased (Energy, Water Resources and Irrigation Sector's current status and roadmap for future, White paper 2018)
Outcome

Farmer's productivity and incomes increased in the project area
Outputs

Sustainable groundwater irrigation systems established

Climate resilient and diversified cropping practices adopted
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The project will not cause serious unpleasant and diverse environmental impacts in the target locations. There were analyses and reports that served as reference materials to acquire preliminary understandings of groundwater resources and its interactions with the surface environment. In fact, the amount of water withdrawal through the high lift irrigation schemes were estimated insignificant compared to high river discharge and limited downstream users. The project locations have no environmentally-sensitive areas and the impacts are mostly momentary disturbance during construction. Due diligence will be carried out during project preparation.
Involuntary Resettlement Small portions of private land will be required for pumping stations. The project will construct 500 deep tube well schemes, covering an area of 22,400 hectares (ha). Each scheme will involve construction of (i) a head tank and pump house, occupying 5x5 m of private land and, (ii) a network of buried pipes and outlets. Each pumping irrigation scheme involves the construction of: (i) one high lift pump and pump house, occupying 3x5 m of private land, (ii) one storage tank; occupying 6x5 m of private land, and (iii) buried pipelines and outlets connecting the storage tank to the field. Small portions of private land will be required to accommodate the pumping stations and storage tanks. This irrigation infrastructure is ideally placed in the corner of adjoining paddocks so that farmers can access water to irrigate their crops. In such cases, the ADB project team proposes that farmers be given the option to voluntarily donate small portion of land to the project, provided that the farmer: (i) directly benefits from the project, (ii) can exercise power of choice, (iii) the donated land is less than 5% of the farmer's holding, (iv) the farmer's decision to donate is made free of coercion. The full extent of physical and economic losses associated with the project, including to non-title holders that may live on government land, will be assessed during project preparation.
Indigenous Peoples A desk-based demographic analysis highlights the presence of indigenous peoples (IP) in the project areas, however, the extent to which IPs are impacted by the project is unknown. IP studies from the region indicate that the Terai IPs (the Tharu and others) derive their livelihood from non-farming activities and thus may not be directly or indirectly impacted. A poverty and social assessment will be conducted during project preparation to determine whether the project triggers ADB's Indigenous Peoples policy.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The executing agency will administer consulting activities.
Procurement The executing agency will administer procurement activities.
Responsible ADB Officer L'Hostis, Marie
Responsible ADB Department South Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SARD
Executing Agencies
Ministry of Energy, Water Resources and Irrigation
Ministry of Irrigation
Timetable
Concept Clearance 19 Sep 2022
Fact Finding 21 Nov 2022 to 25 Nov 2022
MRM 31 Jul 2023
Approval -
Last Review Mission -
Last PDS Update 19 Sep 2022

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
DWRI/MIIP/CS-01/2079-80 Firm - Consulting Active 04 Dec 2022 02 Feb 2023
52130-NEP: Mechanized Irrigation Innovation Project Other Notice Closed 25 Oct 2021 05 Nov 2021
NEP: Mechanized Irrigation Innovation Project Other Notice Active 18 Jan 2019

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.