KATHMANDU, JUNE 3 The Government of Japan has extended an additional concessional loan assistance of 5.7 billion Japanese Yen for the Nagdhunga Tunnel Construction Project, taking the total Japanese support for the project to over 22 billion Yen. The Exchange of Notes was signed today between Finance Ministry Secretary Ghanashyam Upadhaya and Japanese Ambassador to Nepal Maeda Toru on behalf of their respective governments. Likewise, the loan agreement was signed between the Ministry of Finance and the Japan International Cooperation Agency (JICA). According to JICA, the Nagdhunga Tunnel project aims to improve transportation connectivity between Kathmandu Valley and other major parts of the country by easing traffic congestion along the Nagdhunga pass. The 2.68-kilometre tunnel has reached around 99 percent physical progress and is expected to come into operation from July 2026. JICA stated that the project would support Nepal's economic growth, sustainable infrastructure development and regional connectivity through modern tunnelling technology. Japan has been supporting Nepal's road and infrastructure sector through major projects including the BP Highway, Kathmandu-Bhaktapur Road and several bridges across the country.