Clarity On BRI Deals

Following the release of Framework for Belt and Road Cooperation by Nepal’s Ministry of Foreign Affairs on Tuesday, confusion regarding the content of the much-talked about document is now over. Nepal and China signed on the BRI Cooperation Framework during Prime Minister KP Sharma Oli’s visit to China on December 4. The Framework has clarified as to how the selected projects will be funded and implemented while establishing a structured basis to undertake further negotiations on the projects.  Nepal and China will work to ensure technical support and aid financing modalities that suit the need of the two sides and other requirements for sovereign initiated projects, according to the Framework. In the international financial parlance, the term 'aid financing' encompasses grants and soft loans of investment. This has made it clear that Nepal will not necessarily takes loans to realise the goals under the BRI. 

The bilateral cooperation principle involves joint consultation for common development, pragmatic cooperation for meaningful effects and policy environment for increased investment. Nepal joined the BRI, China's global development projects, in 2017 when the two countries first inked a Memorandum of Understanding (MoU) on it. The MoU affirms that the two neighbours, in theory, agreed to implement the trillion dollar project participated in by more than 153 countries. Under the Framework, China will provide technical and financial assistance to support Nepal's development efforts of jointly building the Belt and Road. 

The two countries are aware of the fact that the projects to be implemented under the BRI framework should be commercially viable and investment in them must yield the outcomes in the long-term. For this, the two sides will conduct objective analysis of technical, financial, commercial and economic feasibility and ensure value for money for the prioritised projects. In order to muster financial support for the BRI projects, the two countries call upon the international multilateral financial development institutions or mechanisms interested to pour their money in building the connectivity infrastructure. This implies that BRI involves multiple players- the related government, private banks and multilateral agencies. The argument contradicts the notion that BRI projects will be constructed with the Chinese grant only. 

The two countries agreed on 10 projects to be built under the BRI Framework Cooperation.  They include Tokha-Chhahare Tunnel, Hilsa-Simkot Road Project, Kimathanka-Khandbari Road and Kimathanka Bridge and Integrated Check Post Project, Nepali section of the China-Nepal Cross-Border Railway Project, Amargadhi City Hall Project, Jilong-Rasuwagadhi-Chilime 220kv Cross Border Power Transmission Line, Madan Bhandari University of Science and Technology, Kathmandu Scientific Centre and Science Museum, China-Nepal Friendship Industrial Park and Jhapa Sports and Athletics Complex. The two nations have to sign project-specific agreements or other cooperation documents to implement them. 

The two nations have agreed to jointly build the Trans-Himalayan Multidimensional Connectivity Network through the construction of ports, roads including bridges and tunnels, railways, aviation infrastructure, telecommunication projects, electricity transmission lines to upgrade the level of connectivity.  One important characteristic of the Framework is that it will consider the development stages of China and Nepal, with particular emphasis on Nepal's specific development requirements and priority. At the heart of the cooperation framework lies the readiness of two nations to deepen economic partnership and promote common development by injecting new momentum to trade, infrastructure and connectivity cooperation. The listed projects hold potential to bring about economic transformation of Nepal and boost the bilateral cooperation to a new level.