The government of Japan on Tuesday canceled outstanding debt (principal and interest) worth 1. 67 billion Nepali rupees (23.91 million U.S. dollars) owed by Nepal to Japan, local media reported Wednesday.

"The debt was canceled as per the provisions of Letter of Exchange signed on Oct. 12, 2004 between the two countries," state run Radio Nepal reported.

"The government of Japan has agreed to cancel the outstanding principal and interest owed by Nepal to Japan that have fallen due on or after April 1, 2003 for the loans extended up to 1987," the radio quoted a press statement released by Finance Ministry as saying.

Those loans were extended for the execution of Kulekhani No. 1 and No. 2 Hydropower projects and Udayapur Cement Plant Project of Nepal, the statement noted.

The Nepali government expressed its sincere appreciation to the government of Japan for granting of cancellation of outstanding debts as well as for its continued and generous support for the socio-economic development of Nepal, the statement added.

Source: Xinhua