Kathmandu. KATHMANDU: The Government of Nepal and the Government of Japan have signed a loan agreement for the Koteshwor Chowk Improvement Project.

The agreement was signed at the Ministry of Finance today. Japan will provide a loan of JPY 34.59 billion (approximately Rs 31.76 billion) for the project.

The loan will have a grace period of 10 years, a repayment period of 30 years and an interest rate of 0.2 percent annually, said Tanka Prasad Pandey, Joint Secretary and Spokesperson at the Ministry.

Under this project, underpasses and flyovers will be constructed in Koteshwor and Jadibuti sections.

It is expected to contribute significantly to ease the movement of vehicles plying Kathmandu, Lalitpur, Bhaktapur and BP Highway and to reduce traffic congestion. The project will be implemented through the Department of Roads under the Ministry of Physical Infrastructure and Transport.

Finance Secretary Dr. Japanese Ambassador to Nepal Maeda Toru and Ghanashyam Upadhyaya signed the MoU.

Chief Joint Secretary of the International Economic Relations Division of the Ministry of Finance, Dr. Dhaniram Sharma and JICA Nepal Chief Representative Mitsuzaki Mazuki signed the MoU.

After signing the agreement, JICA Nepal Chief Mitsuzaki Mazuki pledged to take the bilateral cooperation ahead in a more effective way.

On the occasion, Japanese Ambassador expressed his confidence that the implementation of the Koteshwor Chowk improvement project would significantly improve transportation system in the Kathmandu Valley and recalled the decades-old friendly relations between Nepal and Japan.

In his address, Minister Khanal expressed his confidence that the project would bring long-term change in the transportation management of Kathmandu Valley under Nepal-Japan collaboration.