An additional Official Development Assistance (ODA) loan worth 5.7 billion Japanese yen has been extended for the Nagdhunga Tunnel Construction Project, taking the total Japanese loan assistance for the project to more than 22 billion yen.
According to the Japan International Cooperation Agency (JICA), the Exchange of Notes for the additional funding was signed on Thursday by Finance Secretary Ghanshyam Upadhyaya on behalf of the Government of Nepal and Japanese Ambassador to Nepal Maeda Toru on behalf of the Government of Japan.
Likewise, the Loan Agreement was signed by Dhani Ram Sharma, Joint Secretary of the Foreign Aid Coordination Division under the Ministry of Finance, representing the Government of Nepal, and Matsuzaki Mizuki, Chief Representative of the JICA Nepal Office.
Tunnel Nearing Completion
The Nagdhunga Tunnel Construction Project aims to improve transportation through the Nagdhunga Pass, strengthening connectivity between Kathmandu and other key regions of the country.
Construction of the tunnel has entered its final phase, with around 99 percent of physical work already completed. The 2.68-kilometre tunnel is expected to be opened to the public in July 2026.
Once operational, the tunnel is expected to significantly reduce travel time and congestion on the Kathmandu–Naubise route while setting a benchmark for future infrastructure projects in Nepal. The project incorporates modern tunneling technology and is expected to contribute to long-term economic resilience and sustainable development.
Support for Sustainable Development Goals
The initiative contributes to Sustainable Development Goal (SDG) 9, which focuses on industry, innovation, and infrastructure, and reflects Japan’s continued commitment to strengthening Nepal’s road network.
Long-Standing Nepal-Japan Infrastructure Cooperation
Cooperation between Nepal and Japan, particularly through the Japan International Cooperation Agency (JICA), has played a major role in the country’s infrastructure development.
Among the notable achievements of this partnership are the 160-kilometre BP Highway (Sindhuli Road), the 9.1-kilometre Kathmandu–Bhaktapur Road, and the construction of numerous bridges in the Kathmandu Valley and rural areas.
Officials believe that the Nagdhunga Tunnel, once completed, will stand as one of the most advanced and significant infrastructure projects in Nepal’s history, marking a major milestone in the country’s transportation development.
