Nepal, China to sign RMB800m aid pact

KATHMANDU, MAR 17

Nepal and China are scheduled to sign an agreement on Tuesday on boosting Chinese grant aid to Nepal more than five-fold. The northern neighbour has already announced increasing its annual grant to RMB 800 million from the current RMB 150 million.

Chinese Foreign Minister Wang Yi had declared that the grant aid to Nepal would be enlarged during his visit to Kathmandu in December last year. Finance Secretary Suman Sharma and Chinese Ambassador to Nepal Wu Chuntai are scheduled to sign the agreement, Finance Ministry officials said.

Sharma said that increased Chinese aid would be used particularly in priority infrastructure projects selected by the government. “The aid won’t come as a budgetary support but will be based on selected priority projects,” he said. “There has been talk about using the funds in various projects including upgrading the Kathmandu -Rasuwagadhi highway.”

During a meeting of the Nepal-China Joint Economic and Trade Committee held in Beijing from December 17-18 last year, Nepal had requested China to provide financial assistance for the expansion and upgradation of the Kathmandu -Rasuwagadhi and Pokhara-Baglung-Beni-Jomsom highways and expansion of the remaining section of the Kathmandu Ring Road.

Nepal had also requested the Chinese side to expedite the construction of Inland Clearance Depots in Larcha and Rasuwa and help widen and upgrade the Dhulikhel-Tatopani road.

China has upped its annual grant aid to Nepal more than five-fold not long after Nepal and India signed a pact for a $1 billion line of credit during Indian Prime Minister Narendra Modi’s visit to Kathmandu last November.

The northern neighbour has announced increasing the grant aid to Nepal against a backdrop of swelling economic engagement between the two countries.

China is now the second largest source market for Nepal’s tourism after India. The northern neighbour has also emerged as one of the largest sources of foreign direct investment in Nepal. It recorded the highest FDI commitment in fiscal 2013-14, according to the Department of Industry.

State-owned China Three Gorges Corporation has asked for the approval of Investment Board Nepal to invest $1.5 billion in the 750 MW West Seti Hydropower Project. China is also eager to extend its Qinghai-Tibet Railway network to the Nepal border.

Source: The Kathmandu Post