KATHMANDU, Nepal and Japan on Wednesday signed a loan agreement worth 34.59 billion Japanese Yen to advance the Koteshwor Junction Improvement Project, aimed at easing traffic congestion in the Kathmandu Valley.

The concessional loan, facilitated through the Japan International Cooperation Agency (JICA), features a 10-year grace period, a 30-year repayment period, and an annual interest rate of 0.2%.

The project will include the construction of an underpass and flyover in the Koteshwor–Jadibuti section, one of Kathmandu’s busiest corridors, expected to improve traffic flow between Kathmandu, Lalitpur, Bhaktapur, and the BP Highway.

The Department of Roads under the Ministry of Physical Infrastructure and Transport will implement the project.

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

Finance Minister Rameshwor Prasad Khanal highlighted the project’s role in long-term traffic improvements and strengthened bilateral cooperation with Japan. Ambassador Maeda reaffirmed Japan’s support and friendship with Nepal.