Government of Nepal and JICA signed a JPY 10 billion loan agreement to build resilient society

The Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of Nepal in Kathmandu to provide Japanese ODA loan of up to JPY 10 billion (equivalent to NPR 10.39 billion) for the Policy Loan for Economic Growth and Resilience. The agreement was signed with the condition of 40 years repayment and 10 years grace period with 0.01 % interest annually.

The Exchange of Notes regarding the assistance was signed between Madhu Kumar Marasini, Secretary, Ministry of Finance on behalf of the Government of Nepal (GON) and KIKUTA Yutaka, Ambassador of Japan to Nepal on behalf of the Government of Japan (GOJ) in their respective offices.

Similarly, the Loan Agreement was signed between Iswori Prasad Aryal, Joint Secretary, International Economic Cooperation Coordination Division (IECCD), Ministry of Finance on behalf of GON and Ms. ASAKUMA Yumiko, Chief Representative of JICA Nepal Office on behalf of JICA in their respective workplaces.

The objective of the Policy Loan is to support GON in reforming economic and financial policies and institutions, and strengthening domestic industrial base and social security for the poor and vulnerable by providing financial support. This Policy Loan will contribute to the achievement of SDGs Goals1 (No poverty), 8 (Decent work and economic growth), and 10 (Reduced inequalities).

The Policy Loan is the first ODA Loan to be approved in six years for Nepal after Nagdhunga Tunnel Construction Project, and this is the first Program Loan provided to the country by JICA.

To increase the effectiveness, the Policy Loan is co-financing with the World Bank (WB)’s 150 Million USD Policy Lending signed on June 27, 2021. In addition, JICA has provided technical assistance to promote foreign direct investment to Nepal. This Policy Loan aims for synergies with the technical assistance to give momentum to improve an environment to invite foreign investment.