Nepal's Prime Minister KP Sharma Oli embarks on his first official visit to China from December 2 to 5, marking a significant diplomatic engagement since assuming office in July 2024. Oli’s return as Prime Minister, his fourth tenure, has signalled a strategic pivot toward strengthening economic ties with China, aligning with his Communist Party of Nepal (Unified Marxist-Leninist) (UML) policies. 
&nbsp; 
At the invitation of Chinese Premier Li Qiang, Oli's visit aims to bolster bilateral relations and explore avenues for collaboration in key sectors. High on the agenda is the review and acceleration of the Belt and Road Initiative (BRI) implementation plan.&nbsp; 
&nbsp; 
The anticipated agreements include projects such as the construction of the Madan Bhandari University of Science and Technology and the Nepal-China Friendship Park in Damak, Jhapa. To bolster connectivity and trade, the two sides are likely to prioritize infrastructure initiatives, including the Hilsa-Simikot double-lane road, the Tokha-Chhahare tunnel, the Galchhi-Rasuwagadhi cross-border transmission line, and a hydropower project.&nbsp; 
&nbsp; 
Addressing Nepal's trade deficit with China through increased export opportunities for Nepali goods is also a critical agenda item. 
&nbsp; 
The visit is also expected to launch new projects under the BRI framework and address contentious issues, such as converting the loan for Pokhara International Airport into a grant and fast-tracking previously stalled agreements. 
&nbsp; 
Pokhara International Airport has been a lingering challenge in the bilateral relationship. The airport, built with Chinese funding of $216 million and inaugurated on January 1, 2023, has faced hurdles in attracting international airlines, leading to revenue challenges. Similarly, the Gautam Buddha International Airport in Bhairahawa was built by Chinese contractors with a loan amounting to US$76.1 million. 
&nbsp; 
Although China had promised to operate commercial flights to both Pokhara International Airport and Gautam Buddha International Airport, progress has been slow. To promote international connectivity at these airports, Nepal's Civil Aviation Authority in October had decided to allow each international airline one connecting flight to Tribhuvan International Airport, provided their first landing takes place at either Pokhara or Gautam Buddha airports. 
&nbsp; 
On December 31, 2022, just a day before the inauguration of Pokhara International Airport, the Chinese Embassy in Nepal described the airport as a flagship project of the BRI. However, Nepal’s Foreign Minister later clarified that while the airport was financed through a loan from China’s Export-Import Bank, it was not part of the BRI. 
&nbsp; 
This highlights China’s desperation to showcase the success of the BRI in Nepal, as it has yet to implement a single project under the flagship initiative in the small Himalayan nation. 
&nbsp; 
Ahead of Oli’s visit, Nepal’s Foreign Minister, Arzu Rana Deuba visited China, and held discussions with Chinese Foreign Minister Wang Yi on November 29, focusing on a revised BRI Implementation Plan. Nepal has proposed prioritizing grants over loans, signalling its reluctance to undertake high-interest debts given its fragile economy. 
&nbsp; 
Oli faces a delicate balancing act within his coalition government, which includes the Nepali Congress party led by Sher Bahadur Deuba. The Congress has consistently advocated for grants and concessional loans, opposing high-interest commercial loans proposed by China. Congress lawmakers have also cautioned against agreements with strategic or geopolitical implications. 
&nbsp; 
To address these concerns, both coalition partners formed a task force to draft an alternative BRI Implementation Plan emphasising grants.&nbsp;The revised draft, titled the ‘Framework on BRI Cooperation,’ has been submitted to China, but it remains unclear whether Beijing will agree to Nepal's proposed terms. 
&nbsp; 
Former Foreign Minister and CPN-UML leader Pradeep Gyawali congratulated the leaders on reaching a consensus on BRI. 
&nbsp; 
“Congratulations&nbsp;to the Honorable Prime Minister and Nepali Congress Chairman, Sher Bahadur Deuba, for successfully building consensus on the Framework on BRI Cooperation. This marks a significant milestone in elevating Nepal's development partnership with China and fostering a unified national perspective on foreign relations,” he posted on X. 
&nbsp; 
Despite signing the BRI MoU in 2017, Nepal has struggled to implement projects under the framework. Of the 35 initially proposed projects, only nine were approved after Chinese insistence, but none have materialised.&nbsp; 
&nbsp; 
For instance, the Phukot-Karnali Hydropower Project, initially part of the BRI, was handed over to India in 2023 due to China’s lack of interest. 
&nbsp; 
As a Least Developed Country (LDC), Nepal benefits from concessional and low-interest loans. However, its economic limitations make it impractical to pursue large-scale infrastructure projects under the BRI framework through high-interest commercial loans. 
&nbsp; 
The financial terms of BRI would significantly increase Nepal’s debt burden. Moreover, BRI loans often come with considerably shorter repayment periods compared to those offered by other bilateral and multilateral lenders, which typically provide more extended payback timelines. 
&nbsp; 
Oli's visit to China represents a critical opportunity to redefine Nepal’s engagement under the BRI framework while navigating domestic political dynamics and economic constraints. 
&nbsp;

Nepal's Prime Minister KP Sharma Oli embarks on his first official visit to China from December 2 to 5, marking a significant diplomatic engagement since assuming office in July 2024.

Nepal's Prime Minister KP Sharma Oli embarks on his first official visit to China from December 2 to 5, marking a significant diplomatic engagement since assuming office in July 2024. Oli’s return as Prime Minister, his fourth tenure, has signalled a strategic pivot toward strengthening economic ties with China, aligning with his Communist Party of Nepal (Unified Marxist-Leninist) (UML) policies. At the invitation of Chinese Premier Li Qiang, Oli's visit aims to bolster bilateral relations and explore avenues for collaboration in key sectors. High on the agenda is the review and acceleration of the Belt and Road Initiative (BRI) implementation plan. The anticipated agreements include projects such as the construction of the Madan Bhandari University of Science and Technology and the Nepal-China Friendship Park in Damak, Jhapa. To bolster connectivity and trade, the two sides are likely to prioritize infrastructure initiatives, including the Hilsa-Simikot double-lane road, the Tokha-Chhahare tunnel, the Galchhi-Rasuwagadhi cross-border transmission line, and a hydropower project. Addressing Nepal's trade deficit with China through increased export opportunities for Nepali goods is also a critical agenda item. The visit is also expected to launch new projects under the BRI framework and address contentious issues, such as converting the loan for Pokhara International Airport into a grant and fast-tracking previously stalled agreements. Pokhara International Airport has been a lingering challenge in the bilateral relationship. The airport, built with Chinese funding of $216 million and inaugurated on January 1, 2023, has faced hurdles in attracting international airlines, leading to revenue challenges. Similarly, the Gautam Buddha International Airport in Bhairahawa was built by Chinese contractors with a loan amounting to US$76.1 million. Although China had promised to operate commercial flights to both Pokhara International Airport and Gautam Buddha International Airport, progress has been slow. To promote international connectivity at these airports, Nepal's Civil Aviation Authority in October had decided to allow each international airline one connecting flight to Tribhuvan International Airport, provided their first landing takes place at either Pokhara or Gautam Buddha airports. On December 31, 2022, just a day before the inauguration of Pokhara International Airport, the Chinese Embassy in Nepal described the airport as a flagship project of the BRI. However, Nepal’s Foreign Minister later clarified that while the airport was financed through a loan from China’s Export-Import Bank, it was not part of the BRI. This highlights China’s desperation to showcase the success of the BRI in Nepal, as it has yet to implement a single project under the flagship initiative in the small Himalayan nation. Ahead of Oli’s visit, Nepal’s Foreign Minister, Arzu Rana Deuba visited China, and held discussions with Chinese Foreign Minister Wang Yi on November 29, focusing on a revised BRI Implementation Plan. Nepal has proposed prioritizing grants over loans, signalling its reluctance to undertake high-interest debts given its fragile economy. Oli faces a delicate balancing act within his coalition government, which includes the Nepali Congress party led by Sher Bahadur Deuba. The Congress has consistently advocated for grants and concessional loans, opposing high-interest commercial loans proposed by China. Congress lawmakers have also cautioned against agreements with strategic or geopolitical implications. To address these concerns, both coalition partners formed a task force to draft an alternative BRI Implementation Plan emphasising grants. The revised draft, titled the ‘Framework on BRI Cooperation,’ has been submitted to China, but it remains unclear whether Beijing will agree to Nepal's proposed terms. Former Foreign Minister and CPN-UML leader Pradeep Gyawali congratulated the leaders on reaching a consensus on BRI. “Congratulations to the Honorable Prime Minister and Nepali Congress Chairman, Sher Bahadur Deuba, for successfully building consensus on the Framework on BRI Cooperation. This marks a significant milestone in elevating Nepal's development partnership with China and fostering a unified national perspective on foreign relations,” he posted on X. Despite signing the BRI MoU in 2017, Nepal has struggled to implement projects under the framework. Of the 35 initially proposed projects, only nine were approved after Chinese insistence, but none have materialised. For instance, the Phukot-Karnali Hydropower Project, initially part of the BRI, was handed over to India in 2023 due to China’s lack of interest. As a Least Developed Country (LDC), Nepal benefits from concessional and low-interest loans. However, its economic limitations make it impractical to pursue large-scale infrastructure projects under the BRI framework through high-interest commercial loans. The financial terms of BRI would significantly increase Nepal’s debt burden. Moreover, BRI loans often come with considerably shorter repayment periods compared to those offered by other bilateral and multilateral lenders, which typically provide more extended payback timelines. Oli's visit to China represents a critical opportunity to redefine Nepal’s engagement under the BRI framework while navigating domestic political dynamics and economic constraints.

Nepal PM Oli to discuss revival of stalled BRI infra projects during China visit

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Nepal PM Oli to discuss revival of stalled BRI infra projects during China visit