Kathmandu Goes Green


GEF Project of $30.7 Million for Sustainable Urban Transport in Kathmandu Approved


Washington DC, December 17, 2010 - The CEO of the Global Environment Facility (GEF) has endorsed $2.8 million in grants and 27.9 million in cofinancing for a Sustainable Urban Transport (SUT) project in Kathmandu, Nepal. It is the first transport project implemented by the Asian Development Bank (ADB) and one of the last projects approved during the GEF 4 replenishment period that ended this year.


This $30.7 million project will improve the quality of life in Kathmandu by delivering a sustainable urban transport system with upgraded transportation services, increased public safety, better local air quality, and substantive greenhouse gas emission reductions.

“Today we can say that the GEF portfolio represents one of the largest sustainable urban transport programs in the world: this includes 45 projects worldwide, with $249 million committed and an additional $2.5 billion leveraged in cofinancing from the private sector and elsewhere. With this latest addition of Kathmandu, GEF projects can now be found in 83 cities, positively affecting the lives of more than 260 million people each day,” said Monique Barbut, CEO and Chairperson of the GEF.

Kathmandu valley is severely constrained in developing efficient urban infrastructure, notably its UTS. Population growth, urban sprawl, and increasing motorization rates are compounding congestion, pedestrian and vehicular conflict, environmental degradation, road accidents, and poor public transport operation and services. These issues restrict the ability of the valley to function efficiently, which has serious ramifications on continued economic growth and development. This project is expected to contribute significantly to improve these situations and realize sustainable development in Kathmandu.

“Through this project, we hope to provide the city with a more efficient and sustainable urban transport system that will support economic expansion, help address climate change, and mitigate air pollution,” added Sultan H. Rahman, Director General of ADB’s South Asia Department.

The project follows a pragmatic approach, starting reform of the whole UTS through concrete pilot actions integrating all UTS components. The proposed creation of a new public transport division in the Department of Transport Management (DOTM) is an opportunity to rethink the overall institutional organization of the UTS in Kathmandu valley, and is paving the way for progressive setup of a unique urban transport authority. The proposed mechanism to finance the pilot bus routes through a fund managed by the Town Development Fund (TDF) could be the forerunner of a future sustainable urban transport fund to ensure long-term viability and secure adequate finances to support continued improvements to the UTS in Kathmandu valley. The grant and loan proceeds put in the fund would then be seed money, possibly complemented later by proceeds such as fuel tax, parking fines, or carbon credits.

The GEF has recently strengthened its efforts to promote sustainable urban transport projects. One of the remarkable progresses in this field is the development of STAP-GEF methodology on calculating GHG benefits for GEF transportation projects. This is the first project to apply and test this methodology to calculate GHG benefits of the project. This experience is expected to be a spring board to step up the GEF efforts in transport.

Media contact: Christian Hofer, Senior Communications Officer, GEF,, +1 202 413 4185

About the Global Environment Facility
The Global Environment Facility (GEF) unites 182 member governments — in partnership with international institutions, nongovernmental organizations, and the private sector — to address global environmental issues. An independently operating financial organization, the GEF provides grants to developing countries and countries with economies in transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment, linking local, national, and global environmental challenges and promoting sustainable livelihoods.

Established in 1991, the GEF is today the largest public funder of projects to improve the global environment. The GEF has allocated $9.2 billion, supplemented by more than $40 billion in cofinancing, for more than 2,700 projects in more than 165 developing countries and countries with economies in transition. Through its Small Grants Programme (SGP), the GEF has also made more than 12,000 small grants directly to nongovernmental and community organizations, totaling $495 million.

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About the Asian Development Bank
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2009, it approved a total of $16.1 billion in financing operations through loans, grants, guarantees, a trade finance facilitation program, equity investments, and technical assistance projects. ADB also mobilized cofinancing amounting to $3.2 billion.

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GEF Secretariat
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