Nepal, Japan sign grant agreement for BP Highway reconstruction

Nepal and Japan on Thursday signed a grant agreement worth NRs 2.6 billion to support the reconstruction and maintenance of one of the flood-affected sections of the BP Highway.

The BP Highway, stretching 159 km from Bardibas in Mahottari to Dhulikhel in Kavrepalanchok, is one of Nepal’s key national highways originally built with Japanese grant assistance as well as reconstructed post-2015 earthquake.

Severe floods and landslides last year caused extensive damage to several sections of the highway, particularly near the Roshi River area, where some stretches were completely destroyed. The September 2024 rain-swollen Roshi Khola swept away several kilometres of road along the highway, mostly located in Nepalthok (Sindhuli) and Mangaltar (Kavrepalanchok) on the sidelines of the Chure.

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Earlier estimates suggested loss and damage worth NRs 27.98 billion were incurred on 41 roads and highways across the country. The Department of Roads had estimated NRs 7 billion over a period of two years for BP Highway reconstruction.

Nepal had requested reconstruction assistance from the Japanese government in October 2024. By February 2025, Japan had responded positively to the proposal, though it was still assessing whether the support would be provided as a loan or a grant.

The exchange of notes regarding the grant assistance was signed by Finance Secretary Ghanshyam Upadhyaya and Japanese Ambassador to Nepal Toru Maeda. Similarly, Dhaniram Sharma, joint secretary at the Ministry of Finance’s International Economic Cooperation Coordination Division, and Mitsuzaki Mizuki, chief representative of the Japan International Cooperation Agency (JICA) Nepal, signed the grant agreement.