China has agreed to provide grants worth Rs 9 billion (500 million Chinese Yuan) to fund various projects in Nepal.

According to Krishna Prasad Dhakal, spokesperson for the Ministry of Foreign Affairs, Nepal and China entered into agreements on nine issues. These include support for Tokha-Chhahare Tunnel, promotion of bilateral trade, taking forward China assisted development projects, economic and technical assistance, protocol on export of thermally processed buffalo meat and cash support, among others.

The northern neighbor expressed its consent to provide the grant amounts along with other financial support during the four-day visit of Prime Minister KP Sharma Oli to China. The Chinese government will be providing the grants to proposed projects to be developed with Chinese assistance. The programs under consideration are said to be the continuation of the projects started in 2017, which were built mainly in high hills and the Himalayan regions through Chinese assistance.

Apart from the grants, China will also be providing the financial support in the budgetary system of the Government of Nepal. Provided the commitment is materialized, the Government of Nepal can maintain the China supported financial resource in its treasury and utilize the amount according to the budgetary requirement of the country. The amount that Nepal will be receiving under the heading however has not been disclosed.

Likewise, both the countries also signed memorandum of understanding (MoU) for a number of China-supported projects to be built in Nepal between 2024 and 2029. China will be providing grant amounts to finance these projects to be constructed in the next five years.

The two countries also inked a MoU for carrying out the feasibility study for the construction of tunnel-ways along the Tokha-Chhahare road segment.

The northern neighbor had promised to carry out feasibility studies of tunnel road projects in Tokha-Chhahare-Gurjubhanjyang and Betrawati-Rasuwagadhi during Chinese President Xi Jinping’s two-day state visit to Nepal starting October 12, 2019. However, it has not been realized till date. According to the agreement, Nepal will have to conduct the environmental impact assessment of these projects.

In the current visit of Prime Minister Oli, both the countries have also agreed to promote cross-border trade. Although Nepal and China in 2016 contracted to promote free trade between the two countries, it has failed to progress so far.