India has said it would consider providing a new Line of Credit (LoC) to Nepal for the construction of a 76-km long fast track road that connects the Himalayan country with the Indian border.

The Indian assurance of the soft loan came during the third bilateral LoC review meeting between the two sides.

"The Indian side assured the Nepali side that its proposal for a dedicated new Line of Credit for construction of the Kathmandu-Nijgarh fast track Road will be considered by the Indian government favourably," Indian Embassy in Kathmandu said in a statement yesterday.

The fast track road would connect Kathmandu to the country's south where a new international airport has been planned.

During the third bilateral LoC Review Meeting between Nepal and India, the Indian delegation was led by Manpreet Vohra, Joint Secretary (DPA-I), Ministry of External Affairs and the Nepalese delegation was led by Madhu Kumar Marasini, Joint Secretary, Ministry of Finance.
The amount for the new LoC has not been decided yet.

"We have asked for a dedicated line of credit for the project without fixing any amount," said Marasini, adding that the loan amount will be fixed once the cost of the project and investment to be made by the government and the developers are determined.

The feasibility report prepared by the Asian Development Bank (ADB) last year estimated the road project to cost USD 960 million.

The meeting reviewed the progress made on the projects under the USD 100 million, USD 250 million and USD 1 billion LoC extended by India through Export Import Bank Of India.

Nepal army is undertaking the construction of the road touted as North-South Fast Track link after its foundation stone was laid on November 8 last year.

Both sides discussed the modalities for implementation of the LoC pledged by India for the post-earthquake reconstruction of Nepal.

The Indian side looks forward to concrete proposals which can be considered for implementation under the assistance package announced by India in June, the statement said.

The two sides also decided to hold next LoC Review Meeting in January next year in India.