The ruling Nepali Congress and the CPN-UML have finalised a revised draft of the framework agreement for Belt and Road (BRI) cooperation and sent it to China for consideration. This development comes as preparations intensify for Prime Minister KP Sharma Oli’s China visit, which was officially announced by Kathmandu and Beijing on Friday.

Leading an 87-member delegation, Prime Minister Oli is embarking on an official visit to China from December 2 to 5 at the invitation of Chinese Premier Li Qiang. Oli will hold bilateral talks with Premier Li and discuss matters of mutual interest, said the Ministry of Foreign Affairs while announcing the visit.

Oli is also scheduled to meet Chinese President Xi Jinping in Beijing and Zhao Leji, chairman of the Standing Committee of the National People’s Congress of China, the ministry said in a statement on Friday.

As part of the visit, the prime minister will deliver a keynote address at Peking University and speak at the Nepal-China Business Forum, co-hosted by the Embassy of Nepal in Beijing, the China Council for the Promotion of International Trade (CCPIT), and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

One of the key issues on the prime minister’s agenda is the signing of the framework for cooperation on BRI between Nepal and China. The framework was earlier proposed as an implementation plan of the BRI by the Chinese side in 2020. A joint taskforce of the Congress and the UML that revised the plan document has now renamed it as “framework for BRI cooperation”.

After weeks of hectic negotiations, the key coalition partners reached an understanding on the new draft and handed it over to the Chinese side on Friday for their consideration, said a Congress leader.

In order to form a common position on the BRI implementation plan, the two parties had formed a four-member task force to prepare the counter document of the plan initially proposed by Beijing in early 2020.

“We have prepared a new draft, which is now agreed upon by both the Congress and UML and sent to the Chinese side for their consideration. The new draft categorically states that Nepal will accept grants to execute the projects under the BRI, and the new document is solely focused on economic and development cooperation between Nepal and China,” sources privy to the developments told the Post.

“I have heard that an understanding was reached between the Nepali Congress and the UML on a common draft,” said Pradeep Gyawali, the UML deputy secretary, adding that they hope the Chinese side will approve the Nepal proposal.

“The fundamental issue and understanding between the Congress and UML is that, in principle, we are committed to the BRI and want to execute projects under it. The financing modality for each project will be dealt with on a case-by-case basis, and decisions on grants and loans will be made accordingly,” said Gyawali, who has been assisting the UML members of the task force since the start of negotiations between the two parties. Gyawali was foreign minister when Beijing sent the first draft of the BRI implementation plan in 2020.

Initially, the Congress had prepared a draft in line with the party's official position, which was rejected by the UML and the Chinese side. Subsequently, the Nepali Congress worked on a new draft based on the text forwarded by the Chinese side in early 2020.

Ahead of reaching an understanding, Congress President Sher Bahadur Deuba called a meeting of senior party leaders on Friday to discuss Nepal’s position on the BRI implementation plan proposed by China.

In the meeting, it was briefed that most fundamental issues had been sorted out and the remaining differences would be resolved in the meeting of the task force, said Congress leader Arjun Narsingh KC, who attended Friday’s meeting called by Deuba.

“We have traditional relations with China, and we are committed to maintaining good relations with China. But our public debt has been rising rapidly and already reached Rs240 billion—this is a matter of serious concern. Also, our economy is also not gaining momentum. The situation is already alarming as our debt burden has reached 45 percent of the GDP, so we decided not to take any more loans,” said KC.

The Nepali side has proposed signing some project-based agreements, during the prime minister’s visit, which will be funded under the BRI framework.

As per the understanding between the Congress and the UML, Nepal will seek Chinese grants to fund projects like the Kathmandu-Rasuwagadhi road upgrade; Tokha-Chhahare tunnel; infrastructure development on the Nepali side of the Korola border; construction of the Madan Bhandari Technical University; a sports stadium in Dadeldhura; Nepal-China friendship park in Damak, Jhapa, which is Prime Minister Oli’s electoral constituency; construction of the double-lane road between Hilsa and Simikot; cross border transmission line between Galchhi (Nuwakot) and Rasuwagadhi; and one hydropower project.

This project list was discussed between Foreign Minister Arzu Rana Deuba and her Chinese counterpart Wang Yi in Chengdu on Friday. They also discussed the overall aspects of the visit and agendas, including at the dinner hosted by Wang.

Although the Nepali side had initially planned to list these projects in the annex of the new draft of the framework agreement for BRI cooperation, they were later removed.

Now, out of these projects, agreements on some will be signed during the meeting between the prime minister and the Chinese president.

In the revised draft, Nepal has expressed its preference for projects on infrastructure, connectivity and energy while others would be taken up on a case-by-case or project-by-project basis.

After selecting projects, according to the new draft proposed by Nepal, their development and financing modalities will be determined jointly by Nepal and China.

During the visit, the prime minister also plans to raise the issue of converting the loan for the Pokhara International Airport into a grant. Nepal has borrowed 1,378.74 million yuan (around Rs25.88 billion) from the China Exim Bank for the airport’s construction. Nepal had previously requested China to waive the loan, as the airport is struggling to generate sufficient revenue due to a failure to conduct international flights.

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, an official request for loan waiver was sent to China, according to a statement issued by the Ministry of Finance. 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.

The prime minister’s delegation will include Foreign Minister Arzu Rana Deuba; Bishnu Prasad Rimal, chief adviser to the prime minister; Yuba Raj Khatiwada, economic and development advisor; members of parliament; high-ranking government officials; representatives of the private sector; and media persons. Foreign Minister Deuba is already in China to make preparations for the prime minister’s visit.

During the meeting with her Chinese counterpart Wang, Deuba also invited him to visit Nepal at a convenient time and congratulated the Chinese people and the government on the 75th year of the establishment of China and the 70th year of diplomatic ties between Nepal and China, according to a statement by the Ministry of Foreign Affairs.

She noted that Nepal-China ties have made significant achievements and thanked the Chinese government for waiving visa fees for Nepali nationals, the statement said.

Deuba and Wang also expressed hope that both sides will work together to ensure the smooth operation of traditional border points between Nepal and China, as well as hassle-free movements of people and goods. They also discussed continuing high-level exchanges between the two countries. The two leaders also discussed the upcoming visit of Prime Minister Oli and the potential agreements and instruments for various projects.