The Asian Development Bank (ADB) has approved an US$18.5 million concessional loan and a US$10 million grant as additional financing for the Phuentsholing Township Development Project in Bhutan.

ADB has been supporting the development and expansion of Phuentsholing by constructing flood and riverbank erosion defenses along the Amochhu River and facilities for an additional 66 ha of new modern urban area since 2018. This additional financing will continue funding the ongoing activities until their successful completion, which is targeted for 2025. These climate-resilient infrastructures will ensure safe and sustainable expansion of human settlement and commercial activities in the area, said ADB.

Phuentsholing is the country’s largest commercial and industrial hub and serves as Bhutan’s strategic trading gateway. It is the country’s second-most populous city and is anticipated to grow by 5% per annum. Phuentsholing has reportedly reached its current limit for expansion due to being confined by steep terrain and close proximity to the Amochhu River. According to ADB, the project will be a part of efforts to develop Phuentsholing into becoming a regional growth centre and main trading gateway, facilitating its economic development.

“ADB is fully committed with supporting the Government of Bhutan to develop this new township and provide a safe, sustainable, and vibrant community for its people,” said Suzanne Marsh, ADB’s water resources specialist for South Asia. “By constructing flood and riverbank erosion protection measures, such as river walls, raising land, and installing flood early warning system, Phuentsholing city and the new urban areas will have improved resilience to flooding.”

Image: ADB