China has formally invited Prime Minister KP Sharma Oli for an official visit from December 2 to 6. On Tuesday, Chinese Ambassador to Nepal Chen Song handed the invitation, extended by Chinese Premier Li Qiang, to Foreign Secretary Sewa Lamsal, according to top government sources.

After failing to get an invitation from India, a customary first port of call for a new Nepali prime minister, Oli had been mulling visiting China instead.

With China extending an official invite, Foreign Minister Arzu Rana has cancelled her visit to Baku, Azerbaijan, where she was to attend the 29th United Nations Climate Change Conference from November 11-22.

President Ramchandra Paudel will now lead the Nepali delegation to Baku. The prime minister has requested the foreign minister to stay in the country and prepare for his China visit and she will soon start groundwork, according to senior officials at the Ministry of Foreign Affairs.

An office bearer of the CPN-UML, Oli’s party, said that the date of the visit had previously been open due to the busy schedule of Chinese President Xi Jinping. “While meetings with Premier Li Qiang and other senior leaders of Communist Party of China were not an issue, a meeting with President Xi was uncertain,” the party office bearer said.

During a meeting in New York with Chinese Foreign Minister Wang Yi, who is also the State Councilor of China, in September-end, Wang had informed Prime Minister Oli that they would welcome him in China in the first half of December, and the final dates would be decided in mutual understanding.

The prime minister himself was in close communication with Wang and senior Communist Party of China (CPC) leaders in order to expedite his visit, according to sources.

“The prime minister is considering a visit to China, but preparations have yet to start,” said Raghubir Mahaseth, a former deputy prime minister who also heads the UML’s international relations department.

“This is a matter for the government, but so far as I know, there has been some communication, although visit preparations have not reached an advanced stage,” he added.

In order to expedite groundwork for the visit, Foreign Minister Rana is taking the first round of updates on Wednesday. She will hold consultations with representatives from various line ministries. They will update her on the status of various Chinese-funded projects in Nepal, the status of Chinese aid and economic assistance to Kathmandu, and possible areas of cooperation, among other things, officials told the Post.

The prime minister will meet Chinese President Xi, and Oli’s counterpart Li, among other senior CPC leaders, according to officials.

The major agenda of the visit, according to the multiple officials, is conversion of the loan taken for the Pokhara International Airport into a grant, signing the implementation plan for the Belt and Road Initiative, executing some new projects under the BRI framework including at least one mega infrastructure project immediately, and expediting the implementation of past accords and agreements between the two countries.

A joint-secretary at the Ministry of Foreign Affairs said that during the visit, Nepal will ask for a waiver of the loan taken from Exim Bank of China for the construction of the Pokhara International Airport.

Nepal has borrowed 1,378.74 million yuan (around Rs25.88 billion) from the China Exim Bank for the airport’s construction.

The government had previously requested the Chinese side to waive the loan, as Pokhara airport is struggling to generate revenue due to a failure to conduct international flights.

An official request for loan waiver was made during a meeting between Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel and Yang Weiqun, vice chairman of the China International Development Cooperation Agency (CIDCA), on August 23 in Kathmandu, according to a finance ministry statement.

Although the airport came into operation after its inauguration in January 2023, it has failed to generate enough income to sustain itself and service the loan.

After failing to operate regular international flights, the authorities are now using the airport for domestic flights. Successive governments have requested the Chinese side to convert the loan into a grant.

“At first, the request surprised the Chinese,” a finance ministry official said. “As the Chinese themselves placed the Pokhara airport under the BRI scheme, they were clueless about what would happen if other countries too asked for similar waivers. Later, Finance Minister Paudel visited China at the end of September and made a similar request.”

Officials indicated that the prime minister is planning to reach a definitive agreement on the Belt and Road Initiative implementation plan in Nepal, which has been pending since early 2020.

Officials from Nepal and China had held several rounds of discussions for signing the BRI implantation plan, but it is yet to materialise due to differences among Nepali political parties. The National Planning Commission is working on the document and has been exchanging drafts with its Chinese counterpart.

The ruling Nepali Congress has expressed reservations over the plan, stating that Nepal cannot afford high interest loans and prefers grants or concessional loans similar to those offered by the World Bank, the Asian Development Bank and other bilateral and multilateral lenders.

During the visit, the Nepali side might seek China’s support for one (yet to be selected) big project under the BRI.

Besides the BRI framework, Nepal and China have signed another memorandum of understanding to execute various projects related to connectivity and infrastructure under the Trans Himalayan Multi-Dimensional Connectivity Network.

Oli, during his China visit in 2018, had proposed a list of 35 projects to be executed under the BRI. Later, at the Chinese request, Nepal had trimmed down the numbers of projects from 35 to nine.

Officials indicated that prompt execution of BRI related projects will be a top agenda of Oli’s China visit, but it is difficult for Oli to take the Nepali Congress into confidence.

The nine projects to be developed under the BRI are: Rasuwagadhi-Kathmandu road upgrade; Kimathanka-Hile road; Dipayal-China road; Tokha-Bidur road; Galchhi-Rasuwagadhi-Kerung 400kv transmission line; Kerung-Kathmandu rail (feasibility study); Tamor Hydroelectricity Project (762MW); Phukot Karnali Hydro Electric Project (426MW); and Madan Bhandari Science and Technology University.

Recently, Nepal and China have also exchanged letters to upgrade the 8.2 kilometre Kalanki-Maharajgunj section of the Ring Road, build an Integrated Check Post (ICP) and an Inland Container Depot (ICD) at Korala in Mustang, and conduct a feasibility study for repair and maintenance of the Araniko Highway.

The Chinese side has listed these additional projects under the BRI framework. Nepal has yet to respond on whether it accepts such a designation.