The Asian Development Bank this week approved a $1.4 million technical assistance grant to help prepare a project to improve water supply and sanitation in Kathmandu Valley under a private sector participation scheme.

Of ADB's contribution, $700,000 equivalent will come from its Japan Special Fund, financed by the Government of Japan, and $700,000 equivalent from Norway. The remaining $350,000 equivalent will come from Nepal. The project will be completed in later 2004, and will help the government in drafting legal and management reform in water supply. It is expected to prepare the ground for the ADB-led project for piping and distribution of Melamchi water to Kathmandu.

"To ensure the success of the MWSP, the technical assistance will address issues like governance, private sector participation, establishment of a regulatory mechanism, cost recovery, and affordability of services," says the ADB's Keiichi Tamaki.