Nepal, China sign deal on Belt and Road plan, paving way for progress on projects

By Gopal Sharma

KATHMANDU (Reuters) - Nepal has signed a framework agreement with China on the Belt and Road initiative, after an initial pact was signed seven years ago but no progress made since, paving the way for cooperation on projects, its foreign ministry said on Wednesday.

Prime Minister K.P. Sharma Oli has been in Beijing since Monday on a four-day visit, his first to a foreign country since his July swearing-in, breaking tradition by not making New Delhi, with which Kathmandu has centuries-old ties, his first foreign port of call.

Nepal and China signed an initial deal in 2017 for President Xi Jinping's Belt and Road Initiative, which aims to build China's infrastructure and trade links with the world.

However, no projects have been planned or begun in the past seven years, as a framework for cooperation had not been set and as Nepal struggled to get consensus from its political parties.

The signing of the deal on Wednesday implies that both countries will now move ahead with details of projects, which may include road upgrades and transportation corridors, and how to finance them.

Debt concerns have, meanwhile, spurred debate within Oli's coalition government, with the Nepali Congress party, a key supporter of Oli, opposing any project funded by loans.

Nepal and China "signed the Framework for Belt and Road Cooperation today," Nepal's foreign ministry said in a post on X, without giving details.

China has loaned Nepal $216 million to build an international airport in Pokhara, the second-largest city about 125 km (80 miles) west of Kathmandu, which began operating last year.

But the Chinese-built airport, claimed by Beijing as a symbol of Belt and Road success, has grappled with problems such as a lack of international flights, due to India's refusal to let planes use its airspace.

(Reporting by Gopal Sharma; Editing by YP Rajesh and Bernadette Baum)