Chinese President Xi Jinping will announce a 900 million RMB (Rs14.50 billion) economic package to Nepal during the China visit of President Ram Baran Yadav for the Boao Forum for Asia annual conference.
Presidents Yadav and Xi are meeting on Saturday on the sidelines of the conference that is being held in the Hainan Province of China from March 26-29. The meeting will be the first between the heads of state of the two countries after Nepal was declared a republic in 2008.
The aid is on top of the annual Chinese assistance to Nepal that was recently increased from 150m RMB to 800m RMB (approximately Rs 13 billion). In a meeting with Prime Minister Sushil Koirala on Tuesday, Chinese Ambassador to Nepal Wu Chuntai said the “Chinese leadership is considering extending an economic package in addition to the recent assistance to Nepal”.
The Chinese side is also going to announce 1,500 training slots for Nepalis in technical and non-technical sectors over the next five years.
Wu told Koirala that China was interested to increase its aid for the upliftment of Nepal’s socio-economic status and its attempt to graduate from a Least Developed Country by 2022. Leading an 18-member delegation, President Yadav leaves for China on Thursday.
After getting a hint about the announcement from the Chinese side, the Ministry of Foreign Affairs has asked the Ministry of Finance to identify possible projects to be funded with the new aid.
Though the Finance Ministry is yet to ascertain the projects, top officials said the amount would be spent on three road projects–upgradation and expansion of Kodari Highway that links Nepal and China, Rasuwagadi- Kathmandu link road–an alternative to Kodari Highway, and Jomsom (Mustang) to Beni (Myagdi) road.
Officials are said to be in communication with the Chinese side on whether the new aid should be used in mutually agreed projects or Nepal can identify the projects and present them to the Chinese side. “A modality is being worked out,” said a senior government official.
“We need big investments in infrastructure projects as the volume of our trade with China is growing and there are calls for better connectivity,” said the official. “For geo-strategic reasons, we cannot seek bilateral or multilateral funds to build projects closely linked with China.”
Nepal has several other proposed road and infrastructure projects in its northern part that cost billions of rupees. “So we need to seek more Chinese assistance from the Silk Road Initiative of China that has a start-up fund of $40 billion and the China-led Asian Infrastructure Investment Bank, of which Nepal is a founding member,” said the official.
“We had no further discussion with the Chinese ambassador about the aid as both the sides are busy identifying projects and priority areas,” said Dinesh Bhattarai, foreign relations adviser to the PM.
A team from the Foreign Ministry led by Acting Foreign Secretary Shanker Das Bairagi, Chief of Protocol Arjun Kanta Mainali and Jhabindra Aryal, head of the East Asia Division at the ministry who also looks after China affairs, briefed the President about the preparations, his meetings with foreign leaders on the sidelines of the Boao Forum and the agendas.