The Ministry of Finance (MOF) said on Wednesday that it had expanded the local government debt swap program, as part of the central authorities' efforts to stabilize economic growth and prevent debt risks.

The ministry has recently granted another 1 trillion yuan ($161.3 billion) quota to the program, which allows local government to covert their high-interest debt into low-cost bonds that can be repaid at a future date, the MOF said in a statement posted on its website.

The debt-for-bond program was launched by the MOF in March as a way to lower the debt repayment burden of local governments. The latest move has doubled the size of the program to 2 trillion yuan.

The newly added quota will be used to repay local governments' existing liabilities set to come due this year, the ministry said.

A government audit of local government debt as of June 2013 shows 2.78 trillion yuan in debt will mature this year, two-thirds of which are a direct liability for local governments.

The total debt for local governments, including contingent liabilities, stood at 17.9 trillion yuan as of June 2013, according to the latest available data from the National Audit Office.

The debt swap program was launched as China's economy has been faced with increasingly downward pressure and the growth of local governments' revenue has slowed down, the MOF said in the statement.

China's GDP growth slowed to 7.0 percent year-on-year in the first three months of this year, the lowest quarterly growth in six years, according to the National Bureau of Statistics.

Local governments' revenues have also been dragged down by sluggish land sales amid China's slowing real estate market. Their revenue from land sales amounted to 901.6 billion yuan in the first four months of 2015, down 38.2 percent from a year earlier, data from the MOF showed.

Under such circumstances, the MOF noted that the debt swap program will support the financing needs of projects under construction and ease the financial burden for local governments.

The debt swap program is positive for the real economy, because alleviating funding pressure on local governments could support infrastructure investment and stabilize growth, Bank of America Merrill Lynch said in a research note released in mid May.