Nepal plans to ask China to provide grants to execute projects under its Belt and Road Initiative (BRI) during Prime Minister KP Sharma Oli’s upcoming visit to China.

A new memorandum of understanding (MoU) will be signed to expedite BRI projects, by clearly mentioning the projects in the MoU, as per the latest understanding between the Nepali Congress and CPN-UML which is subject to be approved by the Chinese side.

As the prime minister is set to visit the northern neighbour from December 2, the BRI is now in focus, with various quarters keen to see how Nepal will navigate and negotiate the BRI deal with China. Kathmandu is currently considering the BRI implementation plan proposed by Beijing.

The new MoU might be titled “Cooperation Framework on Jointly Building of the BRI between Nepal and China,” said the members of the task force, and it will be shared with the Chinese side for their approval.

If approved by the Chinese side, a new MoU on BRI will be signed during Oli’s visit besides other agreements, said a senior foreign ministry official.

A few MoUs and instruments are proposed for signing during the visit and the two sides have already exchanged the list, including the text of a joint communique to be issued after Oli’s meeting with Chinese President Xi Jinping and Premier Li Qiang on December 3 in Beijing.

A joint taskforce comprising representatives of the Nepali Congress and the CPN-UML has drastically revised the implementation plan and trimmed it down to focus on specific projects, according to leaders.

Foreign Minister Arzu Rana Deuba will leave for China on Thursday. During her meeting with Chinese Foreign Minister Wang Yi in Chengdu, Rana will convey the message of the Oli-led coalition government and present Nepal’s terms and conditions, said a Nepali Congress leader privy to the developments.

Ruling partners Congress and the UML have held extensive discussions over the past couple of weeks on how Nepal should pursue an agreement with Beijing on the BRI’s implementation.

Members of the taskforce met on Wednesday evening to finalise the revised text on the BRI implementation plan proposed by the Chinese side which is now revisited by the ruling party leaders.

Prime Minister Oli is scheduled to visit China on December 2 and Foreign Minister Rana’s trip to the north is to lay the ground for that.

The Congress and the UML have reached an understanding that Nepal should seek grants to fund specific projects under the BRI, which will be listed in a new MoU, said the Congress leader.

The joint task force comprising four members—two each from Congress and UML—under the guidance of Prime Minister Oli and Congress President Sher Bahadur Deuba, has reached a tentative agreement to sign a new MoU on BRI in Beijing. The name and content of the proposed agreement has been kept secret by both sides.

“The new MoU on BRI implementation will focus on specific issues and projects required at present,” said a member of the task force, adding, “The original text of the BRI implementation plan proposed by the Chinese side in early 2020 has been revised drastically and it will be handed over by Foreign Minister Rana to her counterpart Wang in Chengdu.”

“There is no need to include every detail or ambiguous language in the agreement that could lead to multiple interpretations. We want to see BRI as a development cooperation vehicle that will focus on projects related to connectivity, infrastructure and energy,” said the taskforce member.

In her meeting with Wang, Foreign Minister Rana will discuss the new BRI understanding, projects to be funded under the BRI framework, and preparations for the prime minister’s visit, said a foreign ministry official.

Rana’s three-day official visit follows an invitation from her Chinese counterpart Wang, the Ministry of Foreign Affairs in Kathmandu stated.

The foreign minister is scheduled to hold bilateral talks with Wang on Friday. According to the ministry’s statement, the two leaders will have comprehensive discussions on matters of mutual interests.

At a function on Wednesday, UML Deputy General Secretary Pradeep Gyawali said Nepal should clearly communicate with the Chinese about our common interests. “If our interests do not align with theirs, we should politely decline the Chinese proposals,” said Gyawali.

“Discussions and deliberations in Nepal are polarised between grant versus loan for undertaking BRI projects and this is not right,” he added.

“Any foreign assistance should not be seen through the lens of political ideology. We should see the conditions attached. If the grants come with conditions, we should decline. On the other hand, we are not in a stage of taking loans in a way that will put pressure on our economy. If our economic growth was satisfactory, we could take the loan, but with our economic growth struggling to reach four percent, we cannot sustain debt and its servicing,” said Gyawali.

Congress leader Prakash Sharan Mahat, who as foreign minister led the BRI negotiations with China in 2017 and signed the MoU on BRI, echoed similar views.

“Be it India, China, the US or any other country, any economic cooperation should be based on bilateral negotiations and should meet the conditions of both sides,” Mahat said. “We should not get carried away thinking that China or India or the US will be unhappy with us since we did not take economic cooperation and assistance on their terms and conditions.”

“If we follow this principle of taking economic cooperation and assistance on our terms and conditions, that will not create any difficulties,” he said at an interaction held at the Centre for Social Inclusion and Foreign Policy.

“It took me over seven months to finalise the MoU of BRI in 2017,” said Mahat. “We did a lot of homework and prepared the draft after removing several proposals sent by the Chinese side.”