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Management Approves Housing Advisory Project in Bhutan, the 22nd Country to Partner with CDIA on Urban Development

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On 3 September 2021, the CDIA Trust Fund Management approved the Government of Bhutan’s application for the Green and Resilient Affordable Housing Advisory Project, making Bhutan the 22nd country to receive technical assistance from CDIA since its establishment in 2007.

The Government of Bhutan aims to implement the Green and Resilient Affordable Housing Sector Project (GRAHSP) to bring affordable housing to the urban residents of Thimpu, Phuentsholing, Nganglam, Samdrup Jongkhar and Trashiyangtse, thereby enhancing their safety and living conditions. The Asian Development Bank (ADB) is supporting GRAHSP through a $24 million loan and $6 million grant, respectively. CDIA’s role is to support the government by providing an advisory and capacity development assistance to fully realize the objectives of the GRAHSP.

“We very much welcome this opportunity to work in a new country for a project that has a very strong capacity building focus,” says Kathleen Jovellanos, CDIA’s Capacity Development Specialist and the manager of the project. “We will support the National Housing Development Corporation Limited (NHDCL) and the five cities to enable them to provide better access to adequate and affordable housing services for their residents,” she adds.

The Kingdom of Bhutan is a small, landlocked country located in the Himalayan Arc. About 42% of its 763,092 population live in urban areas and it is expected to grow even further. The country is prone to hazards like earthquakes, flash floods and wildfires, which are exacerbated by climate change and the greater concentration of people in cities.

There is poor availability of affordable housing in Bhutan, which impacts negatively on the quality of life of residents. Suitable land is scarce at the same time that construction cost is high and there is inadequate financing support from the government. More than half of urban households rent, and with the increasing demand, housing prices are also on the rise.

NHDCL is leading the delivery and operation of public housing. Of all NHDCL units, more than half is leased to lower income groups at subsidized rent. About 60% of the units were also built before the year 2000, thus, requiring reinforcement to meet the seismic construction standards.

NHDCL plans to construct about 2,500 housing units, with the initial phase targeting 1,000 pipelined for ADB funding under GRAHSP. It will take the opportunity of building new units to strengthen their resilience, improve construction cost efficiencies, target rental housing and explore options for homeownership, and promote private sector participation.

“We will support NHDCL by helping them shape their capacity development and institutional strengthening program,” says Kathleen. “Our team will provide advisory support to develop short-, medium- and long-term interventions to address individual, organizational and institutional gaps that can hamper the implementation and sustainability prospects of GRAHSP,” she further explains.

CDIA consulting team will develop an institutional and capacity develop roadmap that will focus on corporate planning, rental charge review and setting, asset management information system, tenant profiling, public awareness, and billing and collection, among others. They will likewise review the existing housing regulations to be able to suggest improvements, including options for leveraging private sector support.

They will further advise NHDCL and city officials on climate and disaster resilience planning and the design of affordable housing units toward the achievement of a green building certification, a first if its kind in Bhutan, as envisioned by ADB in its loan support. They will also undertake a broader capacity building and knowledge development activities within key departments in the Ministry and in the cities.

Procurement is currently underway for the consulting team that will work closely with NHDCL and the five cities. Their work is expected to commence in the first quarter of 2022.

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