Himalayan News Service

Kathmandu, March 18:

The government of Japan has agreed to extend a grant assistance amounting to $4,622,000 (Rs 338,500,000) to Nepal as a non-project grant aid during the Japanese fiscal year 2003.

Zenji Kaminaga, ambassador of Japan to Nepal, and Bhanu Prasad Acharya, secretary at the ministry of finance, today signed and exchanged the notes of agreement on behalf of their respective governments.

This non-project grant aid has been extended for the purpose of contributing to the economic structural adjustment efforts, being carried out by the government of Nepal, as well as for the mitigation of economic difficulties, including indebtedness, according to the Japanese embassy in Kathmandu.

The non-project grant aid is a foreign currency support to Nepal to secure payments for the import of goods that are urgently needed for development activities in the country. The grant extended under this agreement will be utilised for procuring material and commodities that are essential for the country. Nepal will have to deposit the necessary amount, in Nepali currency, in a bank as a counterpart-fund after the utilisation of this grant.

The currency thus deposited shall be utilised for the development of sectors like health, education, agriculture, drinking water, sanitation and infrastructure, with prior consultation between the two governments.

During the last Japanese Fiscal Year 2002, Japan had extended a grant assistance of 1,300,000,000 Japanese yen in a similar non-project grant aid to Nepal for the purpose of developing infrastructure, education and health.Speaking on the occasion, ambassador Kaminaga expressed his belief that the project will certainly help play a significant role in overcoming economic and social development problems in Nepal, through effective implementation.