Kathmandu, August 11

The Ministry of Finance (MoF) has expressed willingness to arrange required credit for the development of the Fast Track project, on condition negotiations with the developer conclude in favour of Nepal.

“We are ready to provide a portion of line of credit extended by India for the development of Fast Track project. If necessary, we will also seek fresh line of credit from India to help the developer build the project,” Finance Minister Ram Sharan Mahat told The Himalayan Times over phone. “But the negotiation should conclude first and it should be favourable for us.”

READ ALSO: MoPIT to hold fresh talks on Fast Track road project

This is the first time the MoF has explicitly said it was willing to support construction of the project using soft loans provided by India. Earlier, MoPIT had recommended the MoF to provide $750 million loan to IL&FS consortium from the line of credit provided to Nepal by India.

According to Devendra Karki, spokesperson for MoPIT, the MoF is positive in providing the suggested loan and the rest would depend on the negotiations. During Indian Prime Minister Narendra Modi’s visit to Nepal in November, India had formally provided a line of credit of $1 billion (approximately Rs 100 billion) to the government.

Of this amount, 40 per cent was converted into grants during the June 25 International Conference on Nepal’s Reconstruction. At that conference, India also extended a fresh line of credit of Rs 100 billion to Nepal, of which one-fourth was pledged as grant. This amount would be used in rehabilitation and reconstruction works in the aftermath of the devastating earthquakes of April and May.

Recently, Nepal has also explored the possibility of getting fresh dedicated line of credit from India, especially for the purpose of building the Fast Track project. A proposal, in this regard, was tabled during the Nepal-India joint secretary level meeting held in Kathmandu on August 3. India has taken the proposal ‘favourably’.