Japan writes off Rs 7.22b outstanding debt

Japanese ambassador to Nepal Tatsuo Mizuno (L) and Rameshwor Prasad Khanal, Secretary of the Ministry of Finance, signing an agreement on cancellation Nepal's outstanding debt, in Kathmandu, on Thursday, Aug 07 08. nepalnews.com (Photo Courtesy: Japanese Embassy)

The Government of Japan has extended Rs 7.225 billion to the Government of Nepal for Debt Relief Measures in the form of cancellation of outstanding debts that include the principal as of April 1, 2008 and interest accrued till March 31 this year.

Japanese ambassador to Nepal Tatsuo Mizuno and Rameshwor Prasad Khanal, Secretary of the Ministry of Finance of the Government of Nepal, signed and exchanged notes in this effect on Thursday, on behalf of their respective governments.

"It can be said that this cancellation of debt could provide Nepal with a significant opportunity to advance its social and economic development through utilisation of the funds within the Nepalese Government, which would otherwise have had to be used to pay the said funds in outstanding debt," a press release issued by the Japanese embassy said.

Till 1987, the Government of Japan had extended loan assistance to Nepal for a number of projects including Kulekhani Hydroelectric Project (Phase - I and Phase - II, Kulekhani No. 2 Hydro Power Station Project, and Udayapur Cement Plant Project.

Previously, Japan had extended nearly 12 billion rupees as the Debt Relief Measure to Nepal during the period between 1978 and 2002. nepalnews.com mk Aug 07 08