'Not In Position': Nepal Rules Out Loans For China's Belt and Road's Initiative

Kathmandu: Nepal on Saturday said it is not in a position to take loans for projects under China's Belt and Road Initiative and will instead primarily rely on grants, moving forward based on mutual consensus among all stakeholders.

Speaking to reporters at Tribhuvan International Airport upon returning from a three-day visit to China, Foreign Minister Arzu Rana Deuba clarified Nepal's position on the implementation of BRI projects. Her visit was aimed at preparing for Prime Minister K P Sharma Oli’s upcoming official trip to China starting December 2.

"Nepal signed the BRI framework agreement in 2017, but discussions regarding its implementation modality are still ongoing. The projects under BRI will only move forward based on agreements and mutual understanding between Nepal, China, and all stakeholders within Nepal," Deuba said.

In response to a question, the foreign minister said that Nepal is currently not in a position to take loans under the multi-billion dollar infrastructure initiative.

"We made it clear to the Chinese side during our talks,” she said.

BRI is a pet project of Chinese President Xi Jinping to further the global influence of China with investments to build infrastructure projects.

The foreign minister emphasised that the ruling coalition partner, Nepali Congress (NC), has already decided to enforce BRI projects on a grant basis, a decision conveyed to the CPN-UML led by Prime Minister Oli.

"Our discussions in China revolved around progressing with BRI projects through grants," Deuba, who is a also NC leader, reiterated.

Several countries, including the US and India, have raised concerns over the BRI as China doled out huge loans to smaller countries for infrastructure projects without taking into consideration their ability to pay back the money. BRI has raised concerns after China acquired Sri Lanka's Hambantota port for a 99-year lease as a debt swap.

Deuba underscored the strong and close relations between Nepal and China, which have been further bolstered by high-level exchanges.

"This visit is part of our ongoing efforts to strengthen bilateral ties at all levels," she remarked.

During her trip, Deuba held bilateral talks with Chinese Foreign Minister Wang Yi in Chengdu on Friday, the Nepali Embassy in China said in a statement.

According to foreign ministry officials, the talks between Deuba and Wang focused on trade, connectivity, investment, tourism, and people-to-people relations. Connectivity projects, such as cross-border railways, the Tokha-Chhahare tunnel, and economic corridor initiatives, were discussed, teh officials said.

The two sides reaffirmed their mutual support for sovereignty, territorial integrity, and non-interference, with Nepal reiterating its adherence to the 'One China Principle'.

Looking ahead, both countries expressed their commitment to enhancing practical cooperation and preparing for the 70th anniversary of diplomatic relations in 2025.

(Except for the headline, this story has not been edited by Republic and is published from a syndicated feed.)