Nepal, Japan sign loan agreement for Koteshwor Junction Improvement Project

KATHMANDU: Nepal and Japan on Wednesday signed a major loan agreement to move forward with the Koteshwor Junction Improvement Project, a key initiative aimed at easing chronic traffic congestion in the Kathmandu Valley.

The agreement, worth 34.59 billion Japanese Yen, was signed at the Ministry of Finance in the presence of Finance Minister Rameshwor Prasad Khanal. The concessional loan will be provided through the Japan International Cooperation Agency (JICA).

According to officials, the loan carries a 10-year grace period, a 30-year repayment period, and an annual interest rate of 0.2 percent.

Under the project, an underpass and flyover will be constructed in the Koteshwor–Jadibuti section, one of the capital’s busiest and most congested corridors. Once completed, the new structures are expected to significantly smooth traffic flow between Kathmandu, Lalitpur, Bhaktapur, and the BP Highway.

The project will be implemented by the Department of Roads under the Ministry of Physical Infrastructure and Transport.

During the ceremony, Finance Secretary Dr. Ghanshyam Upadhyaya and Japanese Ambassador to Nepal, Maeda Toru, signed the project’s concept agreement. The loan agreement itself was signed by Dhaniram Sharma, Head of the International Economic Cooperation Division at the Finance Ministry, and Mizuki Matsuzaki, JICA Nepal’s Chief Representative.

Finance Minister Khanal said Nepal is committed to advancing bilateral cooperation with Japan in a more effective manner and emphasized that the Koteshwor project would help bring long-term improvements to traffic management in Kathmandu.

Ambassador Maeda expressed confidence that the project, being implemented under Japan’s concessional loan assistance, would play a vital role in improving valley traffic. He also highlighted the longstanding friendship between the two countries.

Senior officials from the Finance Ministry, the Ministry of Physical Infrastructure and Transport, the Department of Roads, the Japanese Embassy, and JICA Nepal were present at the signing ceremony.