KATHMANDU, Dec 5: Ending weeks of debate and uncertainty, Nepal and China signed the Framework for Belt and Road Initiative (BRI) Cooperation agreement in Beijing on Wednesday.
The agreement, which paves the way for implementing BRI-related projects in Nepal, was signed during Prime Minister KP Sharma Oli’s visit to China. "Today, we signed the Framework for Belt and Road Cooperation. As my official visit to China concludes, I am honored to reflect on the bilateral talks with Premier Li Qiang, discussions with NPC Chairman Zhang Leji, and the highly fruitful meeting with President Xi Jinping," Prime Minister Oli posted on X.
The document on the Framework for BRI Cooperation was signed by Acting Foreign Secretary Amrit Bahadur Rai on behalf of the Nepal government and Deputy Head of the National Development and Reform Commission Liu Sushe on behalf of the Chinese government. The signing ceremony took place a day before Prime Minister Oli wraps up his four-day official visit to China.
Earlier on Tuesday, the two countries had failed to sign the deal due to Nepal’s stance against a loan agreement to implement BRI projects. However, the two sides reached an agreement on Wednesday after intense negotiations to find a middle path.
Initially, Nepal proposed in the draft agreement a ‘grant financing cooperation modality,’ which the Chinese side amended to ‘assistance financing modality.’ The term ‘aid assistance financing’ was eventually agreed upon by both parties.
Nepal's negotiation team was led by PM Oli's advisor Yubaraj Khatiwada and Foreign Minister Arzu Rana Deuba, while China's delegation was represented by senior officials from its Ministry of Foreign Affairs. The details of the cooperation framework agreement have not been made public as of Wednesday.
Nepal and China sign BRI Cooperation Framework following intens...
In a 12-point joint statement issued on Tuesday, the two countries reiterated their commitment to deepening bilateral relations and enhancing regional connectivity through the BRI. Both sides agreed to expedite high-quality Belt and Road cooperation, emphasizing infrastructure development under the Trans-Himalayan Multi-Dimensional Connectivity Network.
“The two sides expressed their readiness to sign the MoU on building the Trans-Himalayan Multi-Dimensional Connectivity Network and the Framework for Belt and Road Cooperation between the two Governments as soon as possible,” reads the joint statement.
Nepal and China agree to expedite 10 projects under new BRI deal
Nepal and China have agreed to expedite the development of 10 projects in Nepal after signing the Framework for BRI Cooperation agreement on Wednesday. The two sides will now finalize project-based agreements to implement these projects under the framework.
While Nepal initially proposed 12 projects, two were removed following the agreement. The Kathmandu-Hetauda Pod-way and Kathmandu Valley Transmission Line were excluded from the signed framework.
Projects agreed for implementation under the new framework include the Tokha-Chhahare Tunnel, Hilsa-Simkot Road, Kimathanka-Khandbari Road and Bridge, Geelong-Kerung-Kathmandu Transborder Railway, and the Geelong-Kerung-Chilime 220 kV Cross-Border Transmission Line. Other projects include Madan Bhandari University, Kathmandu Scientific Center and Science Museum, China-Nepal Industrial Friendship Park in Damak, Jhapa Sports Academy in Damak, and Amargadhi City Hall in Dadeldhura.
Sources said that the Sports Academy in Jhapa and Amargadhi Assembly Hall in Dadeldhura were added at Nepal's special request. On Tuesday, Nepal requested China to build one project each in the constituencies of Prime Minister KP Sharma Oli and Nepali Congress (NC) President and former prime minister Sher Bahadur Deuba.
How was the Framework for BRI Cooperation agreement reached?
Although Nepal signed a Memorandum of Understanding (MoU) to join the BRI in 2017, no projects had been implemented under it. China had long urged Nepal to sign the BRI Implementation Plan to expedite projects.
The issue of the BRI Implementation Plan arose weeks before Prime Minister Oli’s visit to China. Differences between the ruling Nepali Congress (NC) and the CPN-UML on whether to implement BRI projects through loan assistance led to intensified negotiations. A Task Force was formed to address these concerns, particularly amid suggestions that Nepal should avoid loan-based BRI projects for now.
The cross party Task Force concluded that signing a Framework for BRI Cooperation agreement, which would guide all project-specific agreements, was essential before proceeding with the Implementation Plan.
“The initial agreement did not make structural arrangements for implementing BRI projects. It lacked recognition of the Implementation Plan China had been pushing Nepal to sign. Hence, we prioritized reaching a Framework for BRI Cooperation agreement first,” explained Task Force member Semanta Dahal, who was invited as an international law expert.
The Framework Agreement signed on Wednesday provides clear guidelines for implementing BRI projects in Nepal. It emphasizes aligning projects with Nepal’s economic priorities and value-for-money principles. “This agreement gives us clarity on where and how to implement BRI projects, paving the way for their execution,” clarified Dahal.
