After Nepal signed up to China’s Belt and Road Initiative in May 2017, the government had formed two committees—led by foreign and finance secretaries—to identify projects for negotiations with the Chinese side. When the finance secretary-led committee listed 35 projects to develop under the initiative, it had brought interest in China’s funding in Nepal to a pitch fever. But with sluggish progress in negotiations in the following months, the Chinese side insisted that Nepal bring down the number of projects under Beijing’s flagship foreign policy initiative to the single digit. Accordingly, the government is now preparing a list of nine projects which will be funded under the BRI.

Government officials say this will be the first batch of projects to be funded under the BRI and that focus will be on energy-and connectivity-related projects.

During Prime Minister KP Sharma Oli’s visit to China in June, the Nepali side had prepared a list of 35 various projects in areas like infrastructure, energy and power, north-south corridor upgradation, free trade areas and construction of integrated check posts at various Nepal-China border points.

Prime Minister Oli, during his meeting with his Chinese counterpart Li Keqiang at the Great Hall of the People in Beijing on June 21 had read out the list of 35 projects to be funded under the BRI during the delegation level talks. But no tangible progress on these projects has been made so far. 

But after the Chinese advised Nepali officials to prioritise the projects, the Nepali side has trimmed the list down to nine projects, at least two officials from the Ministry of Finance and Ministry of Physical Infrastructure and Transportation told the Post on condition of anonymity as they were not authorised to speak on the matter. 

After reviewing the 35 projects that were earlier identified, officials now have zeroed in on three road projects; two hydroelectricity projects; one cross-border railway; one cross-border transmission line and one technical institution under the name of the late Madan Bhandari, a communist leader, to be built under BRI funding, one of the officials said. 

When the list of 35 projects was given to China for further negotiations, the total investment was estimated at around $10 billion. But in the new context, the government is preparing to make a new list before holding negotiations with China, said officials.

Addressing the regular weekly press briefing on Thursday, Minister for Information and Communication Minister Gokul Prasad Baskota, however, said the number of projects was being brought down to 16 from 35.

But officials claimed that the Finance Ministry has already decided to bring the number further down to nine from 16 after “the Chinese side advised us to stay around single digit” following a series of negotiations with the Chinese side.  Baskota on Thursday, however, refuse to share further details on projects to be funded by China under the BRI. “We can share the details only next week after the projects are shortlisted,” he told the press conference. 

“Before negotiations, we have to make our position clear on the financing modality, that is, whether these projects should be developed under loan or grant,” a Finance Ministry official privy to the development told the Post who wished not to be named because talks were still ongoing at the ministry. 

After the projects are shortlisted, the list will be forwarded to the Chinese side through the Ministry of Foreign Affairs for further negotiations, which will include identifying investment and financing 

modalities. The Chinese government has set up an office in Kathmandu, named Commercial Counselor’s Office, with representatives from its Commerce Ministry to deal with Nepal on Beijing-funded projects.

BRI, the signature foreign policy initiative of Chinese President Xi Jinping, has grabbed global attention in recent years, for several reports of countries falling into Chinese “debt trap”, as Beijing expanding its sphere of influence across Asia, Europe and Africa.

Projects under consideration

Upgradation of Rasuwagadhi-Kathmandu road

Kimathanka-Hile road construction

Dipayal to south border with China

Tokha-Bidur road

Galchhi-Rasuwagadhi-Kerung 400kv transmission line

Keyrung-Kathmandu rail (feasibility study)

Tamor hydroelectricity project (762MW)

Phukot Karnali Hydro Electric Project (426MW)