1. The Government of Japan today agreed to extend a soft loan assistance of 3,576 million yen to the Royal Government of Bhutan, for the Rural Electrification Project. The Exchange of Notes to formalize the agreement was concluded this morning at a ceremony held in the Ministry of Foreign Affairs, Thimpu. The Notes were signed and exchanged between H.E. Mr. Yasukuni Enoki, Ambassador of Japan to Bhutan, and Mr. Yeshey Dorji, Foreign Secretary, Ministry of Foreign Affairs, Royal Government of Bhutan, on behalf of their respective Governments.
2. In Bhutan, low rural household electrification percentage (36% as of 2004) and local divergence in electrification level is a bottleneck for balanced and sustainable economic development. Royal Government of Bhutan thus sets the electrification target of 100% by 2020, “Electricity for All” with distribution line expansion and off-grid power supply by independent renewable energy sources. In order to achieve this target, the Integrated Rural Electrification Master Plan Study was conducted under the assistance of Japanese Government, and the formulated Master Plan indicates the action plan to accomplish the final goal of 100% electrification.
3. To support the efforts of the Royal Government of Bhutan, Japanese Government will extend the first soft loan assistance for Bhutan to finance a substantial portion of the implementation of on-grid electrification in 10th Five Year Plan, which is a considerable part of the formulated rural electrification master plan. This concessional loan will be made available through the Japan Bank for International Corporation (JBIC), at the very low rate of 0.01% per annum, with the repayment period 40 years, including the grace period of 10 years.