Nepal, JICA Sign Rs 2.6 Billion Grant Agreement for Rehabilitation of BP Highway

The Government of Nepal and the Japan International Cooperation Agency (JICA) have signed a grant agreement worth up to Rs 2.6 billion for the “emergency rehabilitation” of flood-damaged sections of the BP Highway (Sindhuli Road).

“Government of Nepal and JICA have signed Grant Agreement to provide Grant Aid up to 2.8 billion Japanese Yen (NPR 2.6 billion) for the “Emergency Rehabilitation of Sindhuli Road Affected by Floods”,” JICA said in a statement Thursday, October 30.

The exchange of notes regarding the grant was signed by Ghanashyam Upadhaya, Secretary at the Ministry of Finance, on behalf of the Government of Nepal, and Maeda Toru, Ambassador of Japan to Nepal, on behalf of the Government of Japan, the statement added.

The grant agreement itself was signed by Dhani Ram Sharma, Joint Secretary at the Ministry of Finance’s Foreign Aid Coordination Division, and Matsuzaki Mizuki, Chief Representative of JICA Nepal.

Finance Minister Rameshore Prasad Khanal and Home Minister Om Prakash Aryal attended the signing ceremony.

Floods and landslides triggered by torrential rain between September 26 and 28, 2024, severely damaged several sections of the 160-km highway — a vital trade and transport route connecting Kathmandu with eastern Tarai. Floods due to continuous rainfall from October 3 to 5, 2025, caused further damage to the same stretches.

The new grant aims to help Nepal restore road connectivity and strengthen the disaster resilience of the BP Highway, which was originally built with Japanese grant aid of around 25.8 billion Yen — the largest Japanese road project grant worldwide, according to JICA.

“Since becoming operational in March 2015, the highway has significantly reduced travel time from over nine hours to about five hours between Kathmandu and Bardibas,” JICA noted. The highway also links key districts including Kavrepalanchowk, Ramechhap, Sindhuli, and Okhaldhunga, boosting regional development, trade, and livelihoods.

Nepal and Japan have a long-standing partnership in infrastructure development. Major projects built with Japanese support include the 9.1 km Kathmandu–Bhaktapur Road and the Nagdhunga Tunnel, Nepal’s first-ever road tunnel currently under construction.