The Ministry of Foreign Affairs (MoFA) on Tuesday, December 10, published the recently signed “Framework for Belt and Road Cooperation” between Nepal and China on its website . The agreement follows more than seven years after the two nations signed a Memorandum of Understanding (MoU) on Cooperation under the Belt and Road Initiative (BRI), which remains undisclosed.
Signed during Prime Minister KP Sharma Oli’s visit to China from December 2–4, the framework outlines guidelines for bilateral collaboration under the BRI. Notably, the agreement is not categorized as an international treaty and does not impose binding obligations under international law, as clarified by MoFA.
Read: Nepal Agrees to 'BRI Cooperation Framework' After China Rejects Full Grants
Key Highlights of the Framework
Non-Obligatory Nature: The agreement allows Nepal and China to collaborate on projects under their respective laws without breaching international obligations. It permits both nations to pursue partnerships with other countries freely.
Duration: Effective from December 4, 2024, the framework has an initial validity of three years, with automatic renewals for the same period unless a side intends to terminate it with a three-month prior notice.
Investment Independence: Enterprises from both countries are encouraged to make independent investment decisions and assume associated risks.
Improved Business Environment: Provisions aim to enhance legal and regulatory frameworks to attract foreign investment and support technology transfer.
Financial and Technical Cooperation
The agreement emphasizes China's commitment to Nepal's development through technical and financial assistance, prioritizing project feasibility and cost-efficiency. Both countries aim to seek additional support from international financial institutions for connectivity and development initiatives.
Infrastructure and Connectivity
The framework outlines plans to build a Trans-Himalayan Multidimensional Connectivity Network, including ports; Roads, bridges, and tunnels; Railways; Aviation infrastructure; Telecommunications; and Electricity transmission lines
Banking and Currency Cooperation
The agreement highlights potential collaboration between commercial banks of both nations and the establishment of Chinese banks in Nepal. It also explores the use of national currencies in bilateral trade and investments.
Governance
The Chinese side designates the National Development and Reform Commission alongside the ministries of Foreign Affairs and Commerce, while the Nepali side assigns the ministries of Foreign Affairs and Finance to lead coordination.
Read: BRI Cooperation Framework not Related to Loans: PM Oli
The framework's publication comes amid scrutiny from the United States and India. During his recent Nepal visit, US Assistant Secretary of State for South and Central Asian Affairs Donald Lu stressed the need for transparency in BRI agreements, urging clarity before offering further commentary.
The ruling coalition, however, has lauded the agreement as a milestone, asserting that it does not involve loans or debt obligations.
The current list of projects under the framework include the Tokha-Chhahare Tunnel; Hilsa-Simikot Road Project; Kimathanka-Khandbari Road and Kimathanka Bridge and Integrated Check Post Project; Nepali section of the China-Nepal Cross-Border Railway Project; Amargadhi City Hall Project; Jilong-Rasuwagadhi-Chilime 220 KV Cross Border Power Transmission Line; Madan Bhandari University of Science and Technology; Kathmandu Scientific Center and Science Museum; China-Nepal Friendship Industrial Park; and Jhapa Sports and Athletics Complex.
