China pleges Rs 9.75 b grant to Nepal

Chinese Premier Wen Jiabao during his 5-hour visit signed eight agreements on Saturday, including economic and technical assistance agreement, committing Nepal among other things, a grant assistance of 750 million Yuan (Rs 9.75 billion) for the next three years. Under the agreements, China agreed to provide annual grant assistance of 200 million yuan (about Rs 2.60 billion) to Nepal, raising the assistance volume by a third over what it was providing so far. “Though this will total the grant amount for the next three years to 600 million yuan, China also committed to provide additional 150 million yuan during that period -- making the total grant assistance package at 750 million yuan,” said a highly placed source at the Ministry of Finance. The grant assistance will be used for the development of mutually agreed projects. Wen also pledged special grant assistance of US$ 20 million (over Rs 1.65 billion) to the government to support the peace process. “This is a budgetary support and will be used particularly for financing rehabilitation of Maoist combatants,” said the source. During the bilateral talks, Nepal had tried to secure Chinese premier´s commitment for soft loans through Exim Bank for the development of large scale projects. But instead of making any commitment on credit line, China promised to do away with problems and complexities that Nepal faced in securing soft loans from China. “A Loans Operationalization Agreement, hence, has been signed to ensure easy access to Exim Bank loans,” said Deputy Prime and Foreign Minister Narayankaji Shrestha. China pledged financial and technical assistance worth 10 million yuan (about Rs 130 million) to enhance capability of Nepal Police. Another technical assistance package of 400,000 yuan (about Rs 5.2 million) too was signed for strengthening the Armed Police Force (APF). “Fundamentally, this technical assistance will go toward conducting study for the establishment of an APF college,” Shrestha stated. The two sides also agreed to construct and manage dry ports along the six Nepal-China border points in a bid to facilitate bilateral trade and people´s movement. Under this, the two governments have agreed to develop international-standard dry ports and cargo terminals in Yari-Pulam, Rasuwa-Jilong and Kodari (Tatopani)-Zangmu (Khasha) customs. Dry ports at Kimanthanka-Dingri, Olangchungola-Riwu and Mustang-Ligzi, however, will be of bilateral standard. China further agreed to expedite the implementation of Tatopani Dry Port and upgrading and expansion of the existing Ring Road in the Kathmandu Valley. In yet another agreement, China agreed to allow Nepalis residing within 30 km of the international border to use the pasture and graze their livestock on the other side of the border. During the bilateral talks, Nepali Prime Minister Bhattarai requested for additional grant and loans assistance from China for the development of hydropower and north-south highways. “We are seriously positive about it,” Minister Shrestha at a press meet quoted Wen as saying. Bhattarai also requested China to extend railway line that it was building up to the bordering areas to Kathmandu and also up to Lumbini. The Chinese premier said such an extension was highly possible and China was positive about it. Wen also assured to enhance cooperation to ensure that the construction of Upper Trishuli 3A Hydropower Project, being developed with Chinese concessional loan, will proceed smoothly. He also positively acknowledged China´s participation in the construction of Pokhara International Airport. In this connection, the two sides agreed to make full use of existing mechanisms like Nepal-China Joint Economic and Trade Committee and also decided to form a new Consultation Mechanism at foreign minister level. Wen promised to encourage competent and well-established Chinese companies to invest and start joint ventures in Nepal. The two sides also agreed to continue discussions regarding signing of Bilateral Investment Protection and Promotion Agreement (BIPPA). During the luncheon meeting, when Wen met with senior political leaders including Pushpa Kamal Dahal, Sushil Koirala, Jhalanath Khanal and Mahantha Thakur, he committed to further intensify cooperation for socio-economic development, promotion of trade and tourism, hydropower and transportation infrastructure development, among others. Source: Republica