The Government of the Federal Republic of Germany has agreed to provide an additional grant assistance of Euro 13.1 million (about Rs. 1,175 million) for the Middle Marsyangdi Hydroelectric Project. Of this grant, Euro 0.5 million will be utilized for the implementation of the Neighborhood Support Programme (NSP) of the Middle Marsyangdi Hydroelectric Project (MMHEP) and the remaining amount of Euro 12.6 million will fund MMHEP itself. For this NSP component, Germany had initially provided Euro 2.5 million, which has been very effectively utilized in the project area in the health, education, physical infrastructure, and other development activities. With this amount of Euro 0.5 million added, the total German Grant for NSP component reaches Euro 3 million. Agreements to this effect were signed separately and exchanged at the Ministry of Finance today.

It may be recalled that the Government of the Federal Republic of Germany has committed to providing grant assistance for the Middle Marsyangdi Hydroelectric Project totaling Euro 178.26 million. The assistance agreed under today's agreement, Euro 12.61 million, is in addition to the amount that has been already provided for the implementation of the project. Out of the total, i.e. Euro 178.26 million, financing agreement with the KfW for Euro 16.6 million is yet to be concluded.

The grant agreements were signed by Mr. Vidyadhar Mallik, Secretary of the Ministry of Finance and Mr. Christoph Isenmann, Director of KfW for Bangladesh and Nepal on behalf of the respective Governments.

The Government of Nepal has expressed its sincere appreciation to the people and the Government of the Federal Republic of Germany for this grant assistance, and also for their continued support to the socio- economic development of Nepal. Ministry of Finance