August 07, 2008
 Japan extends Debt Relief Measure
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The Government of Japan has extend a total of eleven billion, six hundred and ninety-one million, three hundred and fifty-three thousand, five hundred and six Japanese yen (¥11,691,353,506), equivalent to seven billion, two hundred and twenty-five million, two hundred and fifty-six thousand Nepalese rupees (NRs.7,225,256,000), or about one hundred and seven million, eight hundred and thirty-nine thousand US dollars (US$107,839,000), to the Government of Nepal for Debt Relief Measures in the form of the cancellation of out-standing debts (that include the principal as of April 1, 2008 and interest having accrued on or before March 31, 2008), which is payable under the Loan Agreements concluded until the Japan's Fiscal Year (JFY) 1987, in accordance with the Exchange of Notes between the both Governments for loan assistance.
His Excellency Mr. Tatsuo MIZUNO, Ambassador of Japan to Nepal, and Mr. Rameshore Prasad Khanal, Secretary of the Ministry of Finance of the Government of Nepal, have signed and exchanged a set of Notes today on behalf of their respective governments.
The volume of debt cancelled amounts to, approximately, twice as mush as the total ODA amount Japan has extended to Nepal during its Fiscal Year 2006. It can be said that this cancellation of debt could provide Nepal with a significant opportunity to advance its social and economic development through utilization of the funds within the Nepalese Government, which would otherwise have had to be used to pay the said funds in outstanding debt.
Till JFY 1987, the Government of Japan has extended loan assistance to the Government of Nepal for the execution of the following projects. i) Kulekhani Hydroelectric Project (Phase - I and Phase - II in JFY 1975 and 1978 respectively), ii) Kulekhani No. 2 Hydro Power Station Project (Phase - I and Phase - II in JFY1981 and 1983 respectively) and iii) Udayapur Cement Plant Project (JFY 1987).
Previously, in order to help Nepal to implement poverty reduction and socio-economic development, the Government of Japan extended Debt Relief Measures to the Government of Nepal under the Exchange of Notes between the two governments. A total of nineteen billion, five hundred and twenty-eight million, six hundred and seventy-eight thousand Japanese yen (¥19,528,678,000) has been extended as the Debt Relief Measure to Nepal during the period between JFY1978 and JFY 2002.
In accordance with the schedule of cancellation of debts under a new arrangement, a total of eight billion, eight hundred and five million, six hundred and fifty-one thousand, seven hundred and seventy-five Japanese yen (¥8,805,651,775) has been cancelled under the exchange of Note Verbales between the two governments during the period between JFY 2003 and JFY 2007.
On the occasion, His Excellency Mr. MIZUNO noted that the Exchange of Notes signed and exchanged today under the new arrangement for canceling all the out-standing debts that were payable to the Government of Japan in the coming years will certainly help reduce the debt burden of the Government of Nepal.
HE Mr. MIZUNO said that high debt burden discourages the economic growth of a country, such as Nepal, causing long-standing obstructions on the economic development. With this consideration, the Government of Japan reached the conclusive decision on today's debt cancellation in order to enable the Government of Nepal to overcome the difficulties against the economic take-off. Since the very purpose for today's debt cancellation is to help Nepal to take the necessary measures to resolve a number of development challenges, HE Mr. MIZUNO said that he expected the Government of Nepal will effective utilize this debt cancellation so that the democratization process and socio-economic infrastructure development be addressed in a holistic manner.
HE Mr. MIZUNO sincerely wished that Japan's continuous support to Nepal, including this debt cancellation, will contribute to the establishment of a New Nepal, one which must be more prosperous and stable, and also to the further strengthening of the friendly relationship between Japan and Nepal.
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