CAAN signs loan agreement with finance ministry

The Ministry of Finance and the Civil Aviation Authority of Nepal (CAAN) on Sunday signed a loan agreement for construction of a regional international airport in Pokhara. Earlier, the two sides had failed to seal the deal following due to differences over interest rate for the loan. The signing of loan agreement has finally paved the way for construction of the regional airport in the lake city. Chief of Pokhara Regional International Airport Project, Pradip Adhikari, told Republica that CAAN will have to pay 5 percent interest on the loan. "Construction work will begin now," he added. The total estimated cost of the airport project is Rs 21.47 billion. The finance ministry had earlier signed an agreement with China Exim Bank to finance the airport project. China is giving 25 percent of the project cost as interest-free loan. It is charging 2 percent on the remaining about. According to Adhikari, CAAN will have to repay the loan in 13 years as per the agreement. Source: Republica