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Nepal and China signed a revised "Framework for Belt and Road Cooperation" on Wednesday, replacing "grant financing" with the term "aid financing" during Nepalese Prime Minister KP Sharma Oli’s official visit to China.

 

The agreement, finalised at a ceremony in Beijing, was confirmed by Nepal’s Ministry of Foreign Affairs on X, formerly Twitter.

 

Today, we signed the Framework for Belt & RoadsCooperation. As my official visit to China concludes, I am honoured to reflect on the bilateral talks with Premier Li Qiang, discussions with NPC Chairman Zhang Leji, and the highly fruitful meeting with President Xi Jinping. pic.twitter.com/vtizLfrI4n

— K P Sharma Oli (@kpsharmaoli) December 4, 2024

The shift from "grant financing" to "aid financing" reflects a broader scope, as aid encompasses both grants and loans, allowing more flexible terms of assistance. The change was prompted by China’s rejection of Nepal’s request for BRI projects to be funded solely by Beijing without loans.

 

Oli’s visit, concluding on December 5, saw heightened attention on the BRI agreement. The framework agreement was signed by foreign secretaries from both countries, with Nepal submitting the draft before Oli's departure for Beijing on December 2. Informal talks were held on Tuesday to resolve differences.

 

"Today, we signed the Framework for Belt and Road Cooperation," Oli posted on X.

 

"As my official visit to China concludes, I am honoured to reflect on the bilateral talks with Premier Li Qiang, discussions with NPC Chairman Zhang Leji, and the highly fruitful meeting with President Xi Jinping." He added that the agreement would enhance Nepal-China economic cooperation under the BRI framework.

 

China’s removal of the term "grant financing" from the final framework and substitution with "financing" was a central outcome of the negotiations. The Nepali Congress party's opposition to accepting loans under the BRI prompted the government to focus on securing projects funded solely by grants.

 

Although the MoUs were not signed during Oli’s meeting with Premier Li, further discussions took place when Nepali Foreign Minister Arzu Rana met Chinese Foreign Ministry officials. China proposed that some BRI projects be financed through loans, but no formal decision was reached by Nepal.

 

A Nepali delegation official confirmed internal discussions on various options, with the final agreement settling on the term "aid."

 

A joint statement released late on December 3 stated, "Both sides have shown their willingness to sign the MoU on establishing the Trans-Himalayan Multi-Dimensional Connectivity Network (THMDCN) and the framework for Belt and Road Cooperation between the two governments at the earliest opportunity."