The Japanese government has signed its official development assistance loan worth Rs 15.2 billion with Nepal government for the Nagdhunga Tunnel Construction Project.

Exchange of notes regarding the project was signed between Finance Secretary Santa Raj Subedi and Japanese Ambassador Masashi Ogawa on Thursday. 

Likewise, a loan agreement of the project was signed and exchanged between Baikuntha Aryal, joint secretary, International Economic Cooperation Coordination Division at the Ministry of Finance, and Jun Sakuma, chief representative of Japan International Cooperation Agency (Jica) Nepal.

“The agreement is signed with the condition of 40 years repayment and a 10-year grace period with 0.01 percent annual interest,” reads a release issued by Jica. “The project is expected to complete by August 2022 as and when the facilities shall be put into service.” The tunnel, which is located on the trunk road connecting Kathmandu, major cities and the Indian border, will make the transportation network more efficient.