KATHMANDU: Nepal and China have signed a framework agreement for Belt and Road Initiative (BRI) cooperation.
The agreement was formalized during a special ceremony held in Beijing, China, on Wednesday, between the Government of Nepal and the Government of China.
The BRI agreement had attracted significant attention during Prime Minister KP Oli’s official visit to China.
The foreign secretaries of both countries signed the framework agreement.
The previously prepared draft framework was signed with the term “aid financing” replacing “grant financing.”
While a grant refers to a subsidy, aid can encompass both grants and loans, offering more flexibility in the terms of assistance.
The shift in language came after China rejected Nepal’s proposal that the projects under the Belt and Road Initiative (BRI) should be funded by China and that Nepal would not take loans under the BRI.
In response, Nepal and Chinese officials held informal discussions on Tuesday to find a middle ground.
China subsequently removed the term “grant financing” from the draft framework proposed by Nepal, replacing it with the more general term “financing.”
Amidst the ongoing discussions, the Nepali Congress’s stance against taking loans under the BRI led the Nepali government to prepare a list of projects intended solely for grant financing.
The MoUs could not be signed during a meeting between Prime Minister KP Oli and Chinese Premier Li Qiang.
However, Foreign Minister Arzu Rana later met with representatives from the Chinese Foreign Ministry.
During these talks, the Chinese side proposed that some BRI projects be funded through loans, but no decision was made by Nepal.
According to an official from the Nepali delegation, there was further internal discussion on various options.
One of the key points was whether to replace “grant” with “aid,” which was ultimately agreed upon.
It may be noted that the joint statement released by Nepal and China late on Tuesday indicated that “both sides have shown their willingness to sign the MoU on establishing the Trans-Himalayan Multi-Dimensional Connectivity Network (THMDCN) and the framework for Belt and Road Cooperation between the two governments at the earliest opportunity”.
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