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Nepali Congress (NC) and CPN-UML are working to bridge their differences over China’s Belt and Road Initiative (BRI) ahead of Prime Minister KP Sharma Oli’s Beijing visit. The NC has taken a firm stance against accepting loans for BRI projects, focusing instead on grants or concessional financing to avoid economic burdens.

A four-member task force representing both parties in the coalition has developed a unified position on the draft BRI implementation plan proposed by China. According to party leaders, the task force’s draft of Nepal’s response has been forwarded to the Chinese side. If China agrees, a new agreement to advance the BRI will be signed during Prime Minister Oli’s visit to China from Dec 2 to 6.

At the leadership level, the NC and UML have reached a consensus that loans under the BRI are unacceptable. Prime Minister Oli has reiterated this position in Cabinet meetings and public forums, emphasizing Nepal’s unwillingness to take loans. This position aligns with the stances of three major parties—NC, UML, and CPN (Maoist Center)—who agree that Nepal’s current economic challenges make loans untenable.

In June, former Prime Minister Pushpa Kamal Dahal expressed in Parliament that Nepal prefers grants over loans and that, if loans are essential, they should be concessional, with interest rates not exceeding 1.5 percent. Dahal also stated that Nepal seeks financing from China under terms similar to those offered by the World Bank and the Asian Development Bank.

However, China’s official stance on the BRI does not include grant provisions. A 2023 Chinese white paper describes the BRI as a joint development initiative rather than a foreign aid program, emphasizing mutual contributions and shared growth. “The principle of joint contribution highlights that the BRI is not an international aid program or a geopolitical tool but a collaborative effort for shared development,” the document states. So far, China has not publicly addressed Nepal’s request for grants.

The Pokhara International Airport loan has become another contentious issue. Nepal is considering asking China to waive the loan. Dahal had made a similar request during his tenure, and now the Oli administration is preparing to do the same.

In September, Deputy Prime Minister and Finance Minister Bishnu Poudel requested China to waive the airport loan. However, Chinese Ambassador to Nepal Chen Song has indicated that waiving such loans may be difficult.

Initially, the NC was staunchly opposed to the BRI, but it has softened its position. NC leaders now believe the BRI could be viable if China offers grants for infrastructure projects. To further these discussions, Minister for Foreign Affairs Arzu Rana Deuba is traveling to Beijing to prepare for Prime Minister Oli’s visit. Rana is expected to finalize the drafts of agreements that could be signed during the visit.

With a tentative consensus between coalition partners, the risk of political instability appears to have been mitigated. A senior NC leader remarked, “We should not oppose the BRI outright but must ensure Oli doesn’t sign any agreements that could lead Nepal into a debt trap.”

In recent weeks, social media platforms are abuzz with suggestions for Prime Minister KP Sharma Oli regarding his official trip to Beijing from Dec 2–6. Although the visit has not been officially announced, preparations are underway, and debates surrounding the Belt and Road Initiative (BRI) and Nepal-China relations have intensified, often factoring in India’s role in the equation.

On Nov 25, former Prime Minister Baburam Bhattarai shared his perspective on social media, stating that he could not attend Oli’s consultation meeting but wanted to offer advice. “Nepal is the oldest independent and sovereign country in South Asia, and one of the oldest in the world. It has every right and responsibility to assert and maintain its sovereignty, come what may,” he wrote. Highlighting Nepal’s unique geopolitical position between rising powers China and India, Bhattarai stressed the need to maintain friendly relations with all parties for national interests. He advocated leveraging opportunities presented by the BRI, just as Nepal has done with India and the US, to boost its economy. While he supports the BRI, his stance on whether Nepal should opt for loans or grants remains unclear.

Political polarization on the BRI continues, with Chinese Ambassador Cheng Song actively lobbying key political leaders to create a favorable environment for its adoption. As the visit approaches, Indian media and think tanks have weighed in. On Nov 22, Rishi Gupta from the Asia Society published an article in The Print titled “India does not need to sweat over Oli’s China drift—Nepal knows the limits.” The piece sparked reactions in Nepal. Aneka Rebecca Rajbhandari, co-founder of The Arnika Project, criticized Indian analysts for their narrow security-focused lens on Nepal-China relations. Similarly, Akhilesh Upadhyay, former editor of The Kathmandu Post and columnist at Hindustan Times, remarked that Indian analysts suffer from an “imperial gaze” toward smaller neighbors but noted that Chinese attitudes are not significantly different.

Despite the ongoing discourse on the topic, Prime Minister Oli has yet to secure full support for the BRI. While he asserts that loans should not fund BRI projects, key coalition partner Nepali Congress (NC) remains hesitant. On Nov 22, Pankaj Das, who identifies himself as a cadre of Rashtriya Swayamsevak Sangh (RSS) cadre and observer of Nepal’s geopolitical affairs, noted a shift in NC’s stance. In his post, he said: “When in government, NC opposed the BRI. In opposition, it rejected both loans and grants. Now, as part of the government, it might consider BRI projects if grants are provided.” Das also suggested that NC and the UML have already agreed in principle to pursue BRI agreements.

Prominent voices on social media have added to the debate. Ajaya Bhadra Khanal, a media personality, suggested that Nepal should carefully examine and remove any suspicious provisions in the BRI implementation plan. In a X (formerly Twitter) post directed at NC General Secretary Gagan Thapa, he emphasized the risks of adopting China’s economic model, which may lead to long-term challenges. Similarly, Pramod Raj Sedhain, a self-taught geopolitical analyst, posted on X that public debate and scrutiny, akin to the Millennium Challenge Corporation (MCC) discussions, are essential for BRI projects. He advocated for transparency and parliamentary debates to ensure accountability.

The lack of transparency surrounding Nepal’s BRI framework agreement, signed in 2017, has fueled further suspicion. Although a four-page document is publicly available, its official status remains unconfirmed. Vijay Kant Karna, a researcher in international relations, stated in a X post on Nov 21 that secret agreements on strategic projects like the BRI are unacceptable without broad stakeholder consultations. He called for comprehensive discussions, similar to those held for the MCC, to ensure public trust.

“China’s BRI strategic plan needs comprehensive discussions in all stakeholders like MCC. Secret accord without proper discussions in parliament and political parties will not be acceptable,” he stated.

Comparisons to past foreign aid initiatives have also surfaced. Journalist Prakash Timalsina highlighted how King Mahendra successfully leveraged Cold War-era assistance from Russia, India, and China for projects like the Mahendra Highway and Araniko Highway. In response, journalist Birat Anupam remarked that he supports both the MCC and the BRI, a stance he described as rare in Nepal’s polarized discourse. Meanwhile, former Foreign Minister Kamal Thapa criticized political parties for undermining national decision-making by relying on foreign support for their political and economic agendas.

“Political parties who are taking not just political support but also economic support from foreign powers for their interests are gradually losing the decision-making power for the national interest,” Thapa argued.

Jainendra Jeevan, a political analyst, warned the NC against adopting an overly rigid stance on the BRI. He argued that antagonizing China, a global power, could strain relations with the ruling UML and alienate other pro-China groups. Jeevan added that without hidden political or military agendas, foreign initiatives like the MCC and BRI could benefit Nepal. However, he stressed the importance of balanced engagement to safeguard national interests.

As Oli’s visit approaches, he has intensified consultations with coalition partners and stakeholders. While dozens of bilateral issues could be addressed, the BRI dominates public discourse. Oli’s previous visits to China were marked by major agreements: the 2016 Transit and Transport Agreement and discussions on railway projects in 2018. The 2024 visit is poised to center on the BRI. Although Oli has not explicitly outlined his agenda, he has emphasized the need for tangible outcomes from the trip.

Interestingly, social media trends reveal a gradual consensus even among NC-leaning experts, who now acknowledge the importance of engaging with the BRI while opposing loans. Left-leaning intellectuals, on the other hand, have long advocated for concessional loans under the BRI framework. This evolving sentiment underscores the complexity of Nepal's position. While the BRI offers economic opportunities, its dominance in public discourse has overshadowed other pressing bilateral issues with China.

In the backdrop of these debates, public demand for transparency and accountability grows louder. Citizens, analysts, and politicians alike agree that robust discussions, both in Parliament and the public sphere, are essential for any agreements under the BRI. Lessons from past controversies, like the MCC, highlight the importance of open dialogue and clear communication to prevent misunderstandings and foster trust.

The stakes of Prime Minister Oli’s upcoming visit are high. Balancing the BRI’s potential benefits with its financial and geopolitical implications will require careful diplomacy. At the same time, ensuring that domestic consensus aligns with national interests remains challenging.

Top leaders’ take

“During my visit, there will be no agreements related to loans. However, the claim that Nepal is at risk of falling into a debt trap is untrue. If we ever need loans, we are free to seek them from any source.” - Prime Minister KP Sharma Oli

“Nepal should not take loans from China under the BRI, as the country lacks the capacity to handle such financial commitments. However, we are open to accepting grants.” - Sher Bahadur Deuba, NC President

“Nepal should proceed with the BRI projects, as they align with our national interests. Having already joined the BRI framework, we must move forward to realize its potential benefits.” - Madhav Kumar Nepal, CPN (Unified Socialist) Chairperson

“Consultations between the Nepali Congress and the CPN-UML regarding Prime Minister KP Sharma Oli’s visit to China are ongoing. There are no significant differences between the two parties, and I am traveling to China to assist with preparations for the visit.” - Arzu Rana Deuba, Minister for Foreign Affairs

“Prime Minister KP Sharma Oli is facing pressure during this trip because the ruling coalition partner, the Nepali Congress, opposes certain aspects of the BRI. Specifically, the NC is firmly against taking any loans. It will be interesting to see how China views this dynamic during the visit.” - Jhala Nath Khanal, CPN (Unified Socialist) senior leader

“The agreements signed with China in the past must be implemented during PM Oli’s visit. The BRI projects should be executed in both letter and spirit, and the implementation plan must be finalized during this trip.” - Pushpa Kamal Dahal, CPN (Maoist Center) Chairperson

Nov 20

Mid Baneshwor, Kathmandu

Newspaper readership might be declining, but in Kathmandu’s tea shops, the headlines are still the spark for lively gossip. I’ve been noticing this ever since I started writing this column. That’s why tea shop owners make sure there’s at least one fresh newspaper on hand every morning—it’s as essential as the tea itself.

The other day, I stepped into a small tea shop in Mid-Baneshwor. It was quiet, just two people sipping tea. When one of them left, I worried the shop might be too empty to gather a decent story. But the man sitting next to me saved the day. He grabbed a copy of Naya Patrika and blurted out: “This is what happens in Nepal all the time. It’s unfair!”

The headline he was reacting to reported political meddling in the investigation of cooperative fraud. Apparently, only opposition leaders were being targeted, while ruling party leaders were conveniently off the hook. He was especially riled up about the arrest of Rabi Lamichhane, the chairman of the Rastriya Swatantra Party, calling it a politically motivated move.

Soon, another patron chimed in, steering the conversation toward corruption during the Panchayat era. He claimed the final years of the regime were riddled with shady deals, especially as the country transitioned to a multi-party democracy in 1990. According to him, revenue offices became cash cows for politicians, with prime ministers cutting deals to place senior officials there in exchange for a slice of the earnings.

Just then, three regulars strolled in, greeting the owner as they made themselves comfortable. The focus shifted to Durga Prasai’s recent arrest. Opinions were flying in all directions. Some defended the government’s move, while others speculated it was an attempt to suppress a rally Prasai had planned. One man brought up Prasai’s claims about Prime Minister KP Sharma Oli having stakes in a Cambodian telecom company. While some dismissed it as nonsense, others argued that Oli’s past visits to Cambodia and the involvement of Nepali businesspeople made it worth investigating.

At this point, someone brought up how easy it is to fake documents and media nowadays. “Deepfakes,” I interjected. That word caught their attention, and I explained what I knew about the technology. Then I slipped back into listening mode as the debate continued.

The conversation took a personal turn when an older man joined us and ordered tea without sugar. He shared how diabetes had been a constant battle for him over the past decade. “It’s tough being alone,” he said. His wife had passed away five years ago, and his children were settled abroad in Canada and Australia. His son was in town for Dashain, mainly to get some dental work done because healthcare is so expensive overseas.

This opened the floodgates to a discussion on medical tourism. One man remarked how even wealthy Nepalis return home for affordable treatment. The conversation turned to lifestyle changes, with some advocating dietary adjustments over exercise. The tea shop owner joined in, admitting he also had diabetes but relied solely on medication.

Talk of health gave way to real estate woes. The older man mentioned trying to sell land in the far-western region but lamented the sluggish market. “Nobody’s buying unless it’s for building a house,” he said. A man from Kavre added that the recent floods and landslides had made things worse. Showing photos on his phone, he pointed out how risky it was to invest in flood-prone areas now. For once, everyone agreed.

The tea shop owner eventually joined the chat, venting about the government declaring a public holiday to mourn a former speaker’s death—after office hours had already started. “What’s the point?” he grumbled. The topic fizzled out quickly, though, with most patrons uninterested.

Finally, the discussion turned to politics, as it always does. The ruling CPN-UML’s decision to hold street protests on November 22 came under fire. “Why is a ruling party blocking roads?” one man asked. Another accused the UML of giving Durga Prasai too much attention. As they debated the party’s stance on China’s Belt and Road Initiative (BRI), my time ran out. I had to leave for a meeting, but the conversation was still going strong when I stepped out.

Once again, the tea shop had delivered—a microcosm of Kathmandu’s concerns, debates, and daily life, all over a cup of tea.

On 21 Nov 2006, Nepal’s Seven Party Alliance and the Maoist party signed the Comprehensive Peace Agreement (CPA), officially bringing an end to a decade-long violent insurgency that claimed over 17,000 lives. Over the past 18 years, significant achievements have been made, such as the drafting of a new constitution and the integration of Maoist combatants into the political mainstream. However, the issues of addressing war-era human rights violations and providing adequate relief to victims remain unresolved.

The passage of the Enforced Disappearances Enquiry, Truth and Reconciliation Commission (Third Amendment) Act in August 2024 has brought a sense of optimism among cross-party leaders, who believe it aligns with a 2014 verdict by Nepal’s Supreme Court and responds to concerns raised by the international community. While foreign governments, including China, have expressed their support for the new law, victims are still skeptical about whether it will lead to meaningful prosecutions for serious human rights violations and whether the reparations process will be sufficient to address their grievances.

The government is now in the process of appointing new members to the Truth and Reconciliation Commission (TRC) and the Commission of Investigation on Enforced Disappeared Persons (CIEDP), both of which have been without leadership for years. A total of 156 individuals have applied for positions within these bodies, but there are concerns about whether the commissions can perform effectively, given their troubled history.

In the past, both commissions were undermined by political interference, lack of resources, infighting among members representing different political parties, and non-cooperation from the bureaucracy. When the commissions were first appointed in 2015, they made little progress, and despite some advances in the investigations following a second set of appointments in 2019, there was no substantial breakthrough. Since 2022, both bodies have been nearly defunct, with the TRC receiving 63,718 complaints from victims, and the CIEDP receiving around 3,200 complaints related to disappearances, yet no significant action has been taken.

Although the recent amendment to the law introduces some progressive changes, it still contains vague provisions regarding the definition of human rights violations, the punishment for such violations, and the timelines for investigating them. This has made the process of investigation and prosecution more complicated. While victims were consulted during the drafting of the bill, they were not involved in the creation of regulations, guidelines, or procedures for its implementation. Suman Adhikari, a vocal representative of victims, points out that this lack of consultation in the final stages of the process is a significant oversight.

CPN (Maoist Center) Chairperson Pushpa Kamal Dahal, who was a signatory of the CPA, has praised the agreement as a foundational document for Nepal’s federal democratic republic and inclusive democracy. He emphasized that the country is now in the process of concluding the remaining tasks of the peace process. However, completing the transitional justice process is far more complicated than political leaders may suggest. Its success depends on a number of factors that must be addressed by the government, political parties, the bureaucracy, and international actors.

One of the key issues is the process of appointing commission members. In the past, appointments were made based on political affiliations rather than merit, resulting in members who lacked the necessary expertise and spent much of their time learning on the job. To avoid repeating this mistake, future appointments must prioritize merit and technical competence, rather than political loyalty.

Another significant challenge is ensuring that the commissions have the resources and staff necessary to carry out their work. In the past, bureaucratic non-cooperation and frequent staff transfers hampered the functioning of these bodies. The new leadership must ensure that qualified personnel are appointed to these commissions and that logistical and financial resources are available to support their work. Additionally, the government must ensure that the commissions operate independently, without undue political interference. Past experience has shown that senior political leaders have often tried to influence investigations into cases involving their own party members.

Effective coordination between the National Human Rights Commission (NHRC) and the transitional justice bodies is also essential for the process to succeed. The NHRC has repeatedly emphasized that commissions must operate in accordance with international standards and be responsive to the needs of victims. The NHRC’s recent statement expressing concern about the current process indicates that there are still issues to be addressed, particularly in terms of coordination and transparency. The government must ensure that the commission is able to function independently and in line with international best practices, without political interference.

Financial support for the commissions is another major hurdle. In the past, a lack of funding and cooperation from the international community hindered the progress of transitional justice mechanisms. The government must work closely with international partners to secure the financial resources necessary for both the commissions’ operations and the reparations process. However, this issue has not yet been adequately addressed, and if left unresolved, it could prevent the commissions from fulfilling their mandate.

Ultimately, the success of the transitional justice process depends on the commitment of political parties to allow the commissions to function independently and impartially. The government must ensure that the commissions are adequately resourced, staffed with qualified professionals, and free from political interference. If these conditions are met, Nepal may finally be able to deliver justice to the victims of the conflict and complete the peace process that began with the signing of the CPA.

China’s Belt and Road Initiative (BRI) has deepened the rift between coalition partners as Prime Minister KP Sharma Oli’s upcoming visit to China draws nearer. Leaders from both parties have become more outspoken, publicly presenting their positions. Former Foreign Minister Pradeep Kumar Gyawali criticized the Nepali Congress (NC) for creating unnecessary obstacles in implementing the BRI.

He remarked, “They (NC leaders) signed the BRI framework agreements but now they are complicating the issue.” This statement highlights the growing divide between the two parties.

On Tuesday, Prime Minister Oli held discussions with NC President Sher Bahadur Deuba on the same issue. Gyawali remarked, “Obviously, there are differences between the two parties, but we will resolve them before Oli’s visit.” 

PM Oli is keen on signing the BRI implementation plan prepared last year, but the NC opposes it. Similarly, the UML supports finalizing certain BRI projects, while the NC strongly opposes them. NC leader Prakash Sharan Mahat, who was foreign minister when the BRI framework was signed in 2017, stated that the NC would accept only grants, not loans, under the BRI. He added, “It’s fine if China provides grants for BRI projects, but there is no need for loans. China has not honored its commitments to Nepal regarding grants.”

Foreign Minister Arzu Rana Deuba will visit China at the end of this month to prepare for PM Oli’s trip. Her visit will determine the future of the BRI’s progress. Shortly after taking office, Rana emphasized that more public discussions are needed before signing any agreement. UML Senior Vice-chair Ishwar Pokhrel is also in China for bilateral talks. The coalition has tasked Minister Rana with making preparations after consulting with leaders from both NC and UML.

The two countries are working on a draft implementation plan, but NC and UML remain divided. China is leveraging its influence over Nepal’s communist parties to facilitate BRI implementation. If the rift between NC and UML widens further, it could threaten the government’s stability. While the two parties have differences on domestic issues, they have managed to coexist, but tensions over the BRI are likely to escalate. NC leaders cite the example of the Pokhara International Airport to argue that infrastructure projects funded by Chinese loans are not economically viable.

CPN (Maoist Center) Chairperson Pushpa Kamal Dahal has been making provocative statements these days. While his rhetoric lacks a clear roadmap, it hints at potential shifts in Nepal’s political landscape. Recently, Dahal admitted he had made a mistake by forming alliances with the Nepali Congress (NC) and the CPN-UML, alliances he has benefited from for over a decade. Despite this, he vowed that his party would contest the upcoming elections independently.

Inconsistent statements characterize Dahal’s political narrative. He has repeatedly claimed he has no intention of becoming prime minister during the current Parliament's term, set to expire in 2027. Yet, on November 16, he unveiled a potential strategy for reclaiming power. He declared that his party’s “magic number of 32” in the House of Representatives could topple the existing coalition. This assertion underscores his urgency to reassert dominance, as Maoist leaders acknowledge that failure to break the NC-UML coalition before the 2027 elections could spell trouble for their party's survival. A senior Maoist leader candidly remarked, “To maintain at least our current strength, we must either ally with the NC or UML, which necessitates dismantling the coalition.”

Maoist leaders believe the current government faces two primary vulnerabilities. First, while Nepal’s bilateral relations are progressing, New Delhi appears hesitant to fully back the UML-led government under Prime Minister KP Sharma Oli. According to a senior Maoist leader, the Bharatiya Janata Party (BJP) and Indian policymakers have shown greater engagement with the NC than with Oli, raising doubts about the coalition’s stability.

Secon, disagreements over China’s Belt and Road Initiative (BRI) could exacerbate tensions. The UML, led by Oli, is eager to finalize a BRI implementation plan to demonstrate tangible progress. However, this push might create rifts within the coalition, as the NC remains wary of BRI commitments. Oli’s cautious handling of the issue reflects these internal dynamics, providing Dahal an opportunity to capitalize on the discord.

Dahal’s recent interactions with New Delhi reveal his strategic pivot. His interview with The Hindu showcased his criticism of Oli for allegedly playing the ‘China card’, signaling Dahal’s intent to align with India’s geopolitical priorities. Over the past six to seven years, Dahal has cultivated stronger ties with New Delhi, aligning mutual interests during his premiership. Notably, his government signed a long-term energy trade deal with India, facilitating Nepal’s electricity export to Bangladesh through the Indian grid. This agreement not only bolstered Dahal’s domestic image by stabilizing the energy sector but also endeared him to New Delhi.

In contrast, Dahal refrained from signing any major agreements with Beijing, including a proposed BRI implementation plan in 2023. His reluctance to engage with China, a departure from Oli’s precedent, has likely pleased New Delhi. Furthermore, Dahal avoided contentious issues such as the Eminent Persons Group (EPG) report and Nepal’s border disputes with India, which UML leaders like Oli have persistently raised. His softer stance on these matters aligns with India’s preference to keep them off the bilateral agenda.

Dahal’s rapport with BJP leaders has also grown, allowing him to leverage India’s influence on Nepal’s political landscape. On contentious issues like secularism, Dahal has conveyed his flexibility, indicating no objection to removing secularism if major parties agree—a stance likely to resonate with the BJP’s ideological agenda.

Aware of shifting international dynamics, Oli recently acknowledged in a party meeting that external conditions may not favor his government. While the UML leadership claims improved relations with India, Dahal’s positioning suggests he might still be New Delhi’s preferred candidate for prime minister. His track record of aligning with India on strategic issues strengthens this perception.

Even if Dahal fails to secure the premiership, he appears open to supporting Sher Bahadur Deuba of the NC until the elections, contingent on an electoral alliance. However, this proposal faces resistance within the NC. While Deuba’s faction fears losing to the UML without Maoist support, a significant section of the NC remains opposed to collaborating with the Maoists, citing ideological and policy differences.

Adding to the coalition’s challenges are disputes over governance issues. The NC and UML have clashed over topics such as the removal of Kul Man Ghising as the head of the Nepal Electricity Authority and the issuance of ordinances to facilitate party splits. These disagreements further expose the fragility of their partnership, creating an opening for Dahal to exploit.

Dahal’s political maneuvers reflect his ambition to return to power by navigating Nepal’s complex internal and external dynamics. By aligning with New Delhi’s strategic interests and exploiting fissures within the NC-UML coalition, he positions himself as a key player in shaping the country’s political future. However, whether he can convert these efforts into a tangible political comeback remains uncertain. The coming months will reveal if Dahal’s strategy of leveraging alliances and external support will succeed or if the Maoists will face an uphill battle to remain relevant in Nepal’s shifting political landscape.

On Nov 15, Nepal marked a historic milestone by beginning to export 40 MW of electricity to Bangladesh via the Indian grid. This first-ever trilateral power transaction between Nepal, India, and Bangladesh symbolizes a significant step toward sub-regional power connectivity. In 2023, India announced its facilitation of this cooperation, setting the stage for broader regional energy trade. Currently, Nepal exports surplus hydroelectricity to the Indian market, and this agreement enables the export of electricity to Bangladesh, creating a foundation for future expansion.

Bangladesh has long expressed interest in investing in Nepal's hydropower projects and is now negotiating with Nepal Electricity Authority (NEA) to import power generated by the 25 MW Trishuli and 22 MW Chilime hydropower projects. However, complexities arise from India’s policy of not purchasing electricity from hydropower projects involving Chinese investment. This forces Nepal to seek alternative markets, such as Bangladesh, for energy generated by China-linked projects. Over the past decade, India and China have vied to invest in Nepal’s hydropower sector, but India has established a dominant presence. While discussions between Nepal and China on a potential power trade agreement continue, tangible progress remains limited.

Nepal’s hydropower sector currently comprises 124 operational plants with a combined capacity of 2,600 MW, alongside 235 projects under construction. Presently generating approximately 2,700 MW, Nepal is projected to reach 10,000 MW within the next decade. Yet, inadequate transmission infrastructure hampers optimal utilization, with hydropower plants forced to scale down production during the monsoon. Remote hydropower projects remain disconnected from the national grid, compelling the government to prioritize transmission line construction.

The Ministry of Energy, Water Resources, and Irrigation has introduced an ambitious plan, the Energy Development Roadmap and Action Plan 2023–2035. This blueprint envisions meeting Nepal’s projected peak demand of 13,500 MW by 2035 while exporting 15,000 MW to India and Bangladesh. Achieving this target necessitates generating 28,500 MW of renewable energy within the timeframe. Both India and Bangladesh seek clean energy sources to meet growing demands, and Nepal’s abundant hydropower offers a sustainable solution.

Uncertainty surrounding Nepal’s electricity market persisted for years, but key agreements have fostered confidence. A pivotal moment came in January 2023, when Nepal and India signed a long-term energy agreement, with India committing to purchase 10,000 MW of electricity over the next decade. This agreement has spurred international investment interest in Nepal’s hydropower sector.

Earlier, in April 2022, Nepal and India signed a joint vision statement on power sector cooperation. This agreement highlighted joint hydropower development, cross-border transmission infrastructure, and bi-directional power trade. Both countries also pledged to expand collaboration under the BBIN (Bangladesh, Bhutan, India, and Nepal) framework, incorporating mutually beneficial terms. India’s quest for renewable energy aligns with its commitment to achieving net-zero emissions by 2070, positioning Nepal as a key energy partner. India has also deepened energy ties with Bhutan, exporting electricity and exploring new energy trade avenues.

Nepal has already started exporting surplus electricity to India during the monsoon, reaching nearly 1,000 MW in 2023. Power trade is seen as a vital means to reduce Nepal’s trade imbalance with India. Cross-border transmission lines, such as an 18-km link under the US Millennium Challenge Corporation's support, are crucial for enhancing energy trade. India is also assisting in constructing additional transmission infrastructure to strengthen bilateral energy connectivity.

Beyond India, Bangladesh is emerging as a promising energy market for Nepal. According to Bangladesh’s 2023 energy report, its total power consumption is 24,911 MW, with natural gas accounting for 45 percent, coal 11 percent, imports 11 percent, diesel 4 percent, furnace oil 26 percent, and hydropower contributing less than 1 percent. This dependency on fossil fuels highlights the need for clean energy, creating vast opportunities for cooperation with Nepal.

Other South Asian countries, such as Pakistan and Bhutan, also possess significant hydropower potential. Pakistan's estimated hydropower capacity is 60,000 MW, of which only 8,000 MW has been developed. Bhutan, with its long-standing energy partnership with India, demonstrates the feasibility of harnessing hydropower for regional benefit.

While bilateral agreements have gained traction, the prospect of a regional energy framework remains uncertain. The South Asian Association for Regional Cooperation (SAARC) signed a framework agreement on electricity cooperation in 2014, emphasizing regional power trade, energy efficiency, and conservation. However, strained relations between India and Pakistan have hindered progress. Similarly, BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) has shown potential. The fourth BIMSTEC Summit in Kathmandu in 2018 proposed forming an intergovernmental group to enhance energy cooperation, particularly in hydropower and renewables.

Recent developments, such as Nepal’s trilateral power trade agreement with India and Bangladesh, could serve as a model for broader regional collaboration. By overcoming geopolitical challenges and fostering synergy, South Asian countries can unlock the immense potential of renewable energy trade. A united effort can transform the region into a hub of sustainable energy, benefiting all stakeholders while addressing pressing environmental and economic challenges.

8:00 am, Nov 14

New Baneshwor

The tea shop was buzzing with energy, but I managed to find an open seat amid the crowd. A lively group of around ten people had already gathered, deeply engrossed in conversation on various societal issues, including the latest political developments. They were discussing the recent passing of Bimala Gauchan, a Gandaki Province Assembly member who had succumbed to dengue. Some shared personal stories, recounting how family members and friends had also fallen victim to this spreading disease.

One man remarked, “Dengue has even reached the hill districts now. Back in 1992, I spent a year in Mustang, and there wasn’t a mosquito in sight because of the cold.” Another chimed in, “With more roads connecting remote areas, dengue is spreading even to the mountains.” Predictably, the group began criticizing the government’s inability to control the outbreak in Kathmandu Valley and beyond. The mention of Manang and Mustang brought the discussion to another familiar topic. “People in Manang are incredibly wealthy. If the rest of Nepal were as prosperous, we’d be the richest country in South Asia,” someone declared.

The group briefly touched on the recent arrest of Deepak Manange, a member of the Gandaki Province Assembly, though no one seemed eager to dive into his controversies. Meanwhile, a man near the entrance, buried in a newspaper, interrupted loudly, “Every page is filled with stories of corruption, crimes, and road accidents!” This drew the group’s attention. They began talking about a recent tragic accident in Kageshwori Manohara, where one person had died in a collision involving a car driven by Prakash Bhujel, a self-styled shaman with a social media following, and a motorcycle.

The conversation shifted to shamanism. Some argued that such beliefs were outdated and harmful, while an older gentleman, likely in his seventies, shared how a shaman had treated his paralysis 30 years ago. Another participant admitted he didn’t believe in shamanism but respected those who did. They noted that Bhujel had promised to cooperate with authorities—something, one remarked, that many politicians might not be so quick to do.

After a short lull, talk shifted to Prime Minister KP Sharma Oli’s upcoming trip to China. “The Western countries will be watching his every move,” someone stated bluntly. They mentioned China’s Belt and Road Initiative (BRI) and the projects it entails but didn’t delve deeply into it. A participant speculated that Oli would likely avoid any major agreements with China, though few seemed interested in exploring the topic further.

Out of nowhere, someone brought up the rising trend of love marriages in Nepal. An older man expressed disapproval, claiming that such marriages often lead to divorce. “Eighty percent of love marriages end in separation,” he said, “inviting new societal problems.” This sparked a debate about the “right” age to marry. “Decades ago, people married at 18 or 20; now, they’re waiting until their 30s,” someone observed. Soon, the discussion broadened to cover the declining population trend in Nepal and beyond, linked to delayed marriages. Another man spoke about the growing empowerment of women in Nepali society, noting that women now play key roles in household decisions, with men ceding some of their traditional authority.

By 8:30, the group began to disperse, each heading off to start their day. As the tea shop slowly emptied, I lingered over my black tea, debating whether to order another cup or leave. Just then, two young men entered, looking like they were in their twenties. One ordered tea with milk, while the other opted for black. Curious, the one with milk asked why his friend preferred it plain. “I have gastritis,” he replied. They soon fell into a conversation about their hectic college and work schedules, complaining that they barely had time to eat properly.

In lowered voices, they shared their financial struggles. “I earn just Rs 8,000 a month, working from 11 am to 7 pm, but it barely covers rent and food,” one said, as they lamented the rising prices of tea and snacks. “I spent all my savings during Dashain and Tihar; I have nothing left now,” he added. Their conversation turned to their future plans—whether to stay in Nepal or try their luck abroad. They looked visibly worried, the uncertainty of their future weighing on them. Just then, four students entered, asking the shopkeeper for cigarettes, who politely pointed them to the designated smoking area.

Last week, I began a weekly column titled Teashop Gossip, where I’ll be capturing and sharing these vibrant exchanges that unfold in Nepal’s local tea shops. For years, these spots have been more than just places for tea—they’re forums where people from all walks of life come together to discuss the pressing issues of our time. In this column, I aim to present these conversations as they happen, preserving the raw voices, views, and insights of the people