Asian Development Bank’s Proposed Loan for the South Asia Subregional 

Economic Cooperation (SASEC) Roads Improvement Project in Nepal

U.S. Position

December 1, 2016

This $256.5 million project is listed as Category A for environment, due to the road’s proximity to a 

national park with a number of protected species. The significant risks associated with this project 

are well acknowledged in the project’s design, which includes an integrated system of mitigation 

measures, as well as two separate layers of independent oversight. 

The United States has had robust consultations with staff and is pleased that these discussions have 

ultimately provided the United States with sufficient reassurances to support this project. More 

importantly, the seriousness and professionalism of staff’s Board engagement is a window into the 

depth of the consultations that have already taken place in preparing this project, foreshadowing

what is to come in its implementation. The United States looks forward to receiving regular updates 

on this process. 

All of this has been necessary in light of the project’s serious environmental risks. USAID and 

other U.S. government partners have invested over $42 million to support biodiversity conservation 

work for over ten years in the nearby Chitwan National Park, particularly to protect the Bengal 

tiger. In light of the extensive conservation activity in the area, the Environmental Impact 

Assessment (EIA) fell short of fully analyzing the project’s cumulative impact on wildlife in the 

area, including in the Barandabhar Tiger Corridor. The United States appreciates and welcomes

ADB’s commitment to complete comprehensive pre-construction wildlife data analysis and conduct 

consultations with relevant stakeholders to work this analysis into an updated cumulative and 

induced impact assessment. 

This upgraded road network will meet critical development goals in Nepal, improving service 

delivery and access to markets and economic opportunities. ADB, the World Bank and other 

development partners with strong safeguards policies must work together to ensure that 

infrastructure in critical habitats meets both the letter and the spirit of the highest environmental 

standards, and that data and best practices are shared broadly to provide borrowers state-of-the-art 

infrastructure solutions. To that end, the United States looks forward to seeing closer collaboration 

among the multilateral and bilateral donors on appropriate mitigation measures going forward. 

Finally, while the project includes five culvert and open-span underpasses for animal movements, 

the United States awaits the pre-construction wildlife study and NGO and development partner 

consultations to evaluate whether these planned measures are sufficient. If not, the proposed budget 

for these mitigation measures may be too low. The United States appreciates that ADB has agreed 

to use the contingency budget to fund any shortfall. The United States also welcomes the dual layer 

of independent supervision in this project, which includes an independent advisory panel of experts 

and an international environmental external monitor that will provide additional oversight. USAID

looks forward to regular engagement with ADB staff on the project and in participating in the 

consultations on the appropriateness of the mitigating measures. 

With these comments, the United States is pleased to support the project.