The Organization of Petroleum Exporting Countries (OPEC) Fund for International Development has agreed to provide a loan assistance of approximately 510.3 million Nepali rupees (7.2 million US dollars) to the Nepali government for Community Managed Irrigated Agriculture Sector Project.

According to a Finance Ministry press release issued here on Friday, the agreement was signed and exchanged between the government and the OPEC Fund for International Development on Dec. 21, 2005 in Vienna, Austria.

The Fund has provided the loan assistance to the government for the implementation of this project which aims at raising the living standards among rural small holders in the central and eastern development regions by boosting the capacity of farmer managed irrigation system and at intensifying agricultural production on 25,000 hectares of existing irrigated land and bring an additional 8,500 hectares under irrigation by improving the water distribution system.

The project also focuses on building the capacities of Water User Associations to identify, plan and implement a range of sub- projects designed to improve irrigation infrastructure such as diversion structures, cross drainage works canals and flood protection facilities.

To ensure the sustainability of the project and improve governance of the sector, the national level institutions responsible for agriculture and water resources will be strengthened by the project, the press release stated.

Source: Xinhua