HIMALAYAN NEWS SERVICE Kathmandu : Underscoring the need for huge investment in the hydropower and infrastructure sectors for the country to achieve its economic growth targets, private sector representatives have floated the idea of tapping into the financial pool of China’s Belt and Road Initiative (BRI).
Speaking at a programme organised by Management Association of Nepal (MAN), Gyanendra Lal Pradhan, treasurer of Federation of Nepalese Chamber of Commerce and Industries (FNCCI), said that the government should accelerate the process of roping in Chinese investment through BRI.
“The BRI vision is critical to expand trade, investment relations and for broader economic cooperation in South Asia and with other partners of the region,” Pradhan stated.
Pradhan’s comments have come at a time when International Monetary Fund Chief Christina Lagarde had told Chinese policymakers last month that while Belt and Road finance could provide much needed infrastructure, ‘ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises, and creating balance of payments challenges’.
At the programme titled ‘Hydropower for financial sustainability of states from BRI funding’, Pradhan said that China has expressed willingness to extend soft loan of up to $20 billion for the development of transport infrastructure and hydropower. “Since China is offering soft loans to BRI signatory countries at two to three per cent interest, we should consider taking up their offer,” he said.
“More than 65 countries have supported Chinese President Xi Jinping’s initiative to revive the ancient silk route. As Nepal has also joined the initiative, the time has come to propose large-scale projects to uplift Nepali economy,” he added.
BRI could be an opportunity for South Asian countries to increase economic development by bridging the infrastructure gap, according to Shailendra Guragain, president of Independent Power Producers Association – Nepal (IPPAN).
Pradhan expressed hope that agreements related to some mega projects of hydropower and rail connectivity will be signed during Prime Minister KP Sharma Oli’s upcoming China visit.
IMF’s Lagarde had said that in countries where public debt is already high, careful management of financing terms is critical and also warned that ‘with any large-scale spending, there is sometimes the temptation to take advantage of the selection and bidding process’.