Kathmandu, June 22:

Germany has agreed to provide a grant assistance of 2 million Euro to Nepal under a new inter-governmental agreement on financial cooperation.

Finance secretary Vidyadhar Mallik and ambassador of Germany to Nepal Franz Ring today signed an agreement on behalf of their respective governments.

The grant amount will be utilised in health and renewable energy sectors.

Of the total 22 million Euro, the grant assistance worth 10 million Euro will be spent for health and family planning programmes, while the remaining 12 million Euro will be spent for the promotion of renewable energy at the Middle Marsyangdi Hydro Electric Project.

These funds are intended for the projects that are supported by KfW Development, a German financing agency located in Frankfurt/Main, states a press release issued by the German embassy here in Kathmandu today. The inter-governmental agreement on financial cooperation is a follow up to the Intergovernmental Negotiations held in Kathmandu in November last year.

German ambassador Franz highlighted the Nepal-German cooperation.

German has contributed about 790 million Euro to the socio-economic development of Nepal.