: Nepal avoids debt trap, says it only wants grants not loans from China under BRI #IndiaNEWS #Other News By Santosh GhimireNew Delhi, July 13: Nepal has conveyed to a visiting senior Chinese Communist

Nepal avoids debt trap, says it only wants grants not loans from China under BRI #IndiaNEWS #Other News
By Santosh GhimireNew Delhi, July 13: Nepal has conveyed to a visiting senior Chinese Communist Party official that the country only wants grants from China, not commercial loans for developing infrastructures under the ambitious Belt and Road Initiative (BRI).
Prime Minister Sher Bahadur Deuba made the remarks at a meeting with the visiting Chinese Communist Party (CCP) leader, Liu Jianchao, in Kathmandu, according to prime ministers press adviser Govinda Pariyar who was present during talks on Sunday.
PM Deuba told the Chinese leader that Nepal is not in a position to afford commercial Chinese loans for infrastructure building under the BRI because the national economy is already under stress due to several reasons including the depletion in foreign currency reserves. Therefore, Nepal wants only grant assistance from China in the coming days, Pariyar told India Narrative on Monday evening.
On the occasion, Liu, who is the head of CPCs International Liaison Department, urged Deuba to accelerate projects under the China-initiated BRI, an infrastructure initiative taken by Chinese President Xi Jinping to connect China with Asia, Europe and Africa.
The prime ministers communication to Liu comes at a time when the Himalayan nation is expressing its unwillingness to move ahead with the cooperation under the BRI mainly owing to the fear that it may slip into a debt trap like another South Asian neighbour Sri Lanka, sources said.
Nepali government officials also echoed the prime ministers sentiment of opposing commercial loans from the northern neighbour under the BRI.
Firstly, we prefer grants from China because we cant afford high-interest rates associated with BRI loans with a relatively short payback period. Secondly, BRI projects are not open for competitive bidding thereby lack financial transparency, a senior government official at Nepals Ministry of Finance, told Indian Narrative in a brief conversation. He said that Chinese loans constitute three per cent of Nepals total foreign loan portfolio.
China often extends loans to other countries in commercial terms via the EXIM bank, Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. Nepal is also one of the founding members of the China-initiated AIIB.
Mrigendra Bahadur Karki, a geopolitical analyst and an assistant professor at the state-run Tribhuvan University, believes that Nepal is unlikely to move ahead with BRI projects at least until the general elections which are scheduled to take place in November this year.
Nepals preference to grant over loans also may not help projects under the BRI to take off. The country has a long experience of taking loans from multilateral agencies like the World Bank, where interest rates are relatively low and payback periods are long, he said.

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