March 7, 2005
 Japan Extends the Non-Project Grant Aid and 2KR to Nepal
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The Government of Japan has agreed to extend grant assistance of one billion eight hundred one million yen ( 1,801,000,000), equivalent to one billion two hundred six million six hundred seventy thousand Nepalese rupees (NRs.1,206,670,000), or approximately seventeen million eighty-two thousand US dollars (US$17,082,000), to His Majesty's Government of Nepal for the execution of Non-Project Grant Aid and the Increase of Food Production (2KR) in Japan's Fiscal Year 2004.
His Excellency Mr. Tsutomu HIRAOKA, Ambassador of Japan to the Kingdom of Nepal, and Mr. Bhanu Prasad Acharya, Secretary of the Ministry of Finance, have signed and exchanged two different Notes today on behalf of their respective Governments.
Japan, being a close friend and development partner, has been extending development assistance to the Kingdom of Nepal in order to enhance the well-being of the Nepalese people and to foster a long lasting friendly and cooperative relationship between the two nations. People to people relationships between Japan and Nepal has also been strongly promoted over past many years. As a result, a relationship of confidence and mutual understanding has been developed between the two nations.
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Considering the aspirations of the people of Nepal, the Government of Japan has been responding to Nepal's requests in achieving sustainable socio-economic development for poverty alleviation in line with PRSP, which will ultimately facilitate ensuring peace building and human security. The Government of Japan also believes that strengthening of the democratization process under a system of democracy and a constitutional monarchy will facilitate to achieve sustainable development in Nepal.
Japan hopes that Nepal will recover its peace and stability as soon as possible on the basis of democracy and constitutional monarchy. As stated in the Ministry of Foreign Affairs Press Secretary Statement issued on February 2, 2005, Japan has been strongly urging that the political leaders be released and that the freedom guaranteed by the constitution be restored promptly. Japan also urges the Maoist to achieve peace through dialogue.
Japan has decided to continue grant-assistance to the people of Nepal, with a view to addressing issues at the core of the Maoist insurgency such as poverty alleviation and redressing social inequity so as to significantly help reduce poverty and cultivate an atmosphere conducive towards attaining peace which would lead to the development of a stable democracy in Nepal.
The Government of Japan expresses its firm belief that the assistance extended today will directly benefit the people of Nepal through the implementation of development activities such as the improvement of agricultural productivity through the supply and use of fertilizer, the advancement of transportation and human communication, the effective implementation of disaster prevention and rehabilitation activities as well as the improvement of health and education in the rural areas of Nepal.
Under the first Note, the Government of Japan will extend a grant of one billion five hundred million yen (1,500,000,000), equivalent to one billion five million Nepalese rupees (NRs.1,005,000,000), to His Majesty's Government of Nepal as Non-Project Grant Aid (NPGA). This Non-Project Grant Aid will be extended for the purpose of contributing to the promotion of economic structural adjustment efforts of His Majesty's Government of Nepal as well as for the mitigation of economic difficulties, including indebtedness, of the Kingdom of Nepal. This Non-Project Grant Aid will be provided as foreign currency support to His Majesty's Government of Nepal to secure payments for the import of essential commodities required for the key development activities in the country, such as rural development, disaster prevention and health services.
In the Japanese Fiscal Years 2002 and 2003, the Government of Japan had extended a total of one billion eight hundred million yen (1,800,000,000) as grant assistance for similar Non-Project Grant Aid to Nepal.
Under the second Note, the Government of Japan will extend a grant of three hundred one million yen (301,000,000), approximately two hundred one million six hundred seventy thousand Nepalese rupees (201,670,000), to His Majesty's Government of Nepal for the purpose of procuring fertilizers in order to boost agricultural production under the Increase of Food Production (2KR). This has been designed to meet the ever-increasing demand for food in Nepal.
The Government of Japan has been extending Grant Assistance for the Increase of Food Production (2KR) to Nepal since JFY 1977. Furthermore, in the Japanese fiscal year 2002, the Government of Japan extended 2KR grant to Nepal amounting to five hundred million yen
(500,000,000).
However, His Majesty's Government of Nepal will have to deposit a specified amount of money separately, in Nepalese currency, in a bank as a counterpart-fund of NPGA and 2KR after the utilization of the aforementioned Grants. The currency thus deposited under the NPGA counterpart fund is to be effectively utilized in health, education, local development, reconstruction, rehabilitation and development of rural areas, disaster management and, drinking water and sanitation with prior consultation between the two Governments. At the same time, the 2KR counterpart fund is to be effectively utilized for agricultural, forestry and/or fisheries development in addition to the increase of food production with prior consultation between the two Governments.
On the occasion, HE Mr. HIRAOKA expressed his sincere hope that the continued support of the Government of Japan to His Majesty's Government of Nepal in its development efforts will help in increasing the socio-economic development of Nepal as well as enhancing the well-being of the Nepalese people. HE Mr. HIRAOKA also expressed his belief that this support will also help strengthen the existing friendly and cooperative relationship between Japan and the Kingdom of Nepal.
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