Nepal-China Current Affairs

Nepal, China sign three pacts to boost energy, economic ties

China and Nepal have signed three pacts to further boost their ties in power, energy and economic sectors. The agreements signed cover oil and gas resources exploration, economic and technological cooperation and promotion of investment.

These agreements were signed after visiting Chinese Vice-Premier Wang Yang held discussions with Nepal’s Deputy Prime Ministers Bijaya Kumar Gachhadar and Krishna Bahadur Mahara.

Key Facts

The agreements cover three different domains viz. (i) economic and technological cooperation, (ii) framework agreement on promotion of investment and economic cooperation and (iii) China-aid oil and gas resources survey project.

These pacts also include a feasibility study for excavating natural gas and petroleum in mountain areas and plains of Terai region of the Himalayan country. They will help to make significant contributions in Nepal’s socio- economic transformation.

Both countries also agreed to establish hydropower projects and transmission lines and take steps for technological development in Nepal, which suffers from acute shortage of electricity. China also agreed to upgrade 114-kilometre Araniko highway- an old route connecting two countries, which was damaged and subsequently closed after the massive 2015 Nepal earthquake.


Nepal Signs Agreement for Mega Hydroprojects with Chinese Firm 

Nepal has struck a major deal with China Gezhouba Group Corporation (CGGC) for developing a 1,200 MW Budhigandaki Hydroelectric Project, which will be the biggest hydro project in Nepal having  the potential to resolve its perennial power crisis. The MoU was signed in the presence of outgoing Prime Minister of Nepal Pushpa Kamal Dahal ‘Prachanda’ and Chinese Ambassador to Nepal Yu Hong.

Salient Highlights

As per the agreement, the hydro project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project. funds would be made available  in the form of soft loan or commercial loan from Chinese financial institutions. The EPFC model which makes the contracting firm responsible for making all the arrangements including mobilisation of financial resources is considered to be one of the most effective models for development of infrastructure projects.

CGGC has been given the overall responsibility for executing the project. it will also conduct additional studies on and investigations into the project. A time period of one year has been allotted to conduct assessment of the hydropower project and arrange necessary funds for its development.

CGGC, at present is constructing a 30 MW Chameliya Hydropower Project in the far-west and 60 MW Upper Trishuli 3A Hydropower Project in Nepal.