TOKYO. May 4: Japan signed a contract to fend $1 billion to an international consortium building two light-water nuclear reactors in North Korea, the Foreign Ministry said today. reports Reuters.

The aid for the Korean Peninsula Energy Development Organisation (KEDO) was delayed for several months as Tokyo considered cutting off its funding for the project last August when North Korea fired a missile over Japanese air space.

The ministry said on Monday that Japan signed a contract to lend the money to KEDO based on a 1994 framework agreement between the United States and North Korea.

North Korea agreed to freeze its nuclear programme in return for $5 billion worth of free fuel and safer nuclear power reactors under the agreement.

Construction was slated to start by June 15 but the actual startup depended on whether the countries slated to provide funds for the work received parliamentary approval for their allotment, the South Korean head of KEDO said earlier this year.