Finance Secretary Suman Prasad Sharma and Chinese Ambassador to Nepal Wu Chuntai signed an accord on the increased aid at the Finance Ministry on Tuesday on behalf of their respective governments.

Nepal has been receiving RMB 150 million annually as grant assistance from the northern neighbour. The increased amount has been received under Economic and Technical Cooperation.

Speaking at the signing ceremony, Sharma said the grant received from China would be spent on various development projects including the construction of mega infrastructure. “The amount will be utilized for development programmes as agreed by the two sides,” he added.

The ministry said that the funds would used to give continuity to national priority projects in the next fiscal year.

Chinese envoy Chuntai said that the Chinese government was keen to support Nepal in the development of socio-economic areas. “They include programmes related to technical assistance, training and food security,” he added.

On the social front, the Chinese government has supported Nepal to build Araniko Highway, Sunkoshi Hydropower, BP Koirala Memorial Hospital, Civic Hospital and Banepa Polytechnic Institute, among others. On the economic front, the northern neighbour has pledged financial support for the development of Tatopani dry port, regional international airport in Pokhara and Upper Karnali Hydropower Project, expansion of the Ring Road in Kathmandu and other projects.

China is also likely to construct an Inland Container Depot in Rasuwagadhi in the near future. Nepal has requested China to help upgrade the Kathmandu-Rasuwagadhi, Pokhara-Baglung-Beni-Jomsom and Dhulikhel-Tatopani highways. China has also pledged to provide a soft loan to buy four Chinese-made aircraft for Nepal Airlines Corporation.  

“The new platform of joint cooperation will help to further strengthen the ties between the two countries,” Chuntai said. Nepal needs to ensure political stability for sustainable economic and social growth, he added.

Meanwhile, China has emerged as one of the largest sources of foreign direct investment in Nepal. It recorded the highest foreign direct commitment in the last fiscal year, according to the Department of Industry.

Similarly, Chinese tourist arrivals to Nepal crossed the 100,000 mark in 2013 reaching an all-time high of 113,173, largely due to improved air connectivity between Nepal and China. Arrivals from China in 2012 amounted to 71,861 persons. Around 93 percent of the Chinese tourists were first time visitors. Ambassador Chuntai had said recently that the number of Chinese tourists to Nepal would reach 250,000 within a couple of years with increased flights between the two countries and land connectivity through Rasuwa and trans-Himalayan roads.