Some 26 months after pledging Rs100 billion to aid Nepal’s recovery after the 2015 earthquakes, India on Thursday signed four memoranda of understanding. Senior officials from the two countries exchanged the MoUs in the presence of Prime Minister Sher Bahadur Deuba and his Indian counterpart Narendra Modi in New Delhi.

As per the understanding, India has agreed to use the housing grant component for the reconstruction of 50,000 houses. The southern neighbour will also support sectors like education, health and cultural heritage.

During the International Conference on Nepal’s Reconstruction, India had announced the sum for the post-earthquake rebuilding effort. One fourth of the $1 billion was extended as grant assistance.

“It’s a project agreement between the two nations, based on a financial agreement signed earlier,” said Bhisma Kumar Bhusal, deputy spokesperson for the National Reconstruction Authority.

According to Bhusal, the two countries have identified specific projects in the earthquake affected districts. The signing of project agreement has opened gateways for project implementation. As the agreement has been signed in reimbursement model, the government will mobilise the fund and then settle it with India after works. “Hence, there won’t be issues while mobilising the fund,” Bhusal said.

The recent developments give a huge boost to the country’s reconstruction drive. The NRA got a Rs145.93 billion budget for the fiscal year 2017-18. NRA officials said around 37 percent of the total budget was allocated based on the grant and soft loan pledged by India. The project agreement signed on Thursday falls under the Rs25 billion grant component.

The NRA has signed agreements with 632,047 beneficiaries so far for the construction of private homes. While all of them have received the first tranche of aid, 56,687 have received the second and 2,877 have got the third instalment. In the immediate aftermath of the Gorkha Earthquake, the government decided to provide Rs200,000 per household as private house rebuilding aid, which was later increased to Rs300,000 to be distributed in three instalments of Rs50,000, Rs150,000 and Rs100,000.

There is minimal progress in the reconstruction of educational institutions, cultural heritage sites and health centres too. With both the countries already agreeing on specific projects, the NRA expects to achieve significant progress in reconstruction of the infrastructure in the current fiscal year.