Govt, EXIM Bank to okay joint mechanism to discuss lending
KATHMANDU, DEC 07 -
The government and the Export-Import (EXIM) Bank of China have been working on a general framework agreement to set up a joint mechanism to discuss further lending and review the progress of projects financed by it.
Such a bilateral mechanism has become necessary as the EXIM Bank of China, which is the overseas len-ding arm of the Chinese government, has emerged as a big lending partner for major infrastructure projects in Nepal.
“We have talked about going ahead by signing a memorandum of understanding,” said Kailash Raj Pokharel, under secretary at the Finance Ministry. “We are now preparing a draft of the MoU.” He added that there was a chance of signing the MoU during the upcoming visit of Chinese Prime Minister Wen Jibao if the two sides agreed on the text of the MoU.
According to him, the move was taken in order to increase interaction between the two sides as there is no office of the EXIM Bank of China here. “We can hold dialogue with it once or twice a year under the mechanism which will help our economic partnership.”
Work is progressing on the EXIM Bank of China-funded Upper Trishuli 3A hydropower project. Altho-ugh it has been involved in overseas financing for a long time, it entered Nepal this year with the signing of a US$ 123 million loan for the project.
Meanwhile, Nepal has sent a formal application to the bank seeking credit worth US$ 145 million to build a regional international airport in Pokhara.
“This mechanism will also be an indication of the importance Nepal gives to the EXIM Bank in its development process,” said Pokharel.
In recent years, China has been upping its aid level to Nepal. The northern neighbour has pledged loans and grants worth more than
Rs 10 billion for Nepal’s infrastructure development so far this year.
In the last fiscal year, Chinese aid to Nepal stood at Rs 2.55 billion. China now
figures in the list of the top five development partners. China has also been telling Nepal that besides concessional loans, it could get commercial loans from other Chinese banks too.
Source: Kantipur
