Nepal’s parliament has repeatedly demanded, across multiple administrations and parliamentary committees, that any BRI implementation agreement be subject to public scrutiny and debate before signature. Those demands were only partially met. Lawmakers consistently called for transparency on loan terms, financing modality, and project selection, but successive governments — particularly those led by left-aligned parties with closer ties to Beijing — negotiated the terms largely outside of parliamentary oversight. When the original BRI MoU was signed in 2017, its contents were kept confidential by both governments. Certain contentious provisions only became public after a media leak in 2022.
The standoff over the BRI implementation plan lasted more than seven years. The core disagreement was not primarily about transparency — though that was a secondary concern — but about financing. Nepal insisted that BRI projects be funded through grants or concessional loans at rates comparable to those offered by the World Bank and the Asian Development Bank. China resisted use of the word “grant” outright. The impasse was only resolved in December 2024, during Prime Minister Oli’s visit to Beijing, when the two sides agreed on the compromise phrase “aid assistance financing” — a deliberately ambiguous term that encompasses elements of both grants and loans, and whose practical meaning in project-level agreements remains to be negotiated. Nepal signed a new BRI Framework Cooperation agreement on those terms. Not a single BRI project had been implemented in the seven and a half years since the original MoU.
The terms that civil society organisations and parliamentary committees have sought to scrutinise go beyond financing modality. They include interest rates, repayment schedules, grace periods, penalty clauses, governing jurisdiction for dispute resolution, and procurement conditions. These are standard elements of any significant sovereign loan agreement. They are also elements that China’s development lending agreements have historically treated as confidential — a practice documented in rigorous detail by the AidData research laboratory at the College of William and Mary. The original 2021 study examined 100 Chinese loan contracts signed with 24 borrower countries. A 2025 update expanded the dataset to 371 contracts across 60 countries and confirmed the original findings hold in the larger sample.
AidData’s analysis found that Chinese loan contracts commonly include confidentiality clauses preventing borrowers from disclosing terms to third parties; collateral arrangements structured around lender-controlled escrow accounts rather than physical assets; “No Paris Club” clauses that keep Chinese debt out of collective restructuring with other creditors; and cross-default provisions that allow Chinese lenders to accelerate repayment if the borrower’s political relations with Beijing deteriorate. Not all of these features appear in every agreement, and different Chinese state lenders — the China EXIM Bank and China Development Bank — use somewhat different templates. But the pattern is sufficiently consistent that Nepal’s civil society concerns about transparency are grounded in documented practice elsewhere, not speculation.
The opacity problem in Nepal’s case is not hypothetical. The original BRI MoU remained classified for years, its contents emerging only through a leak. The 2024 framework agreement’s project-level financing details have not been made public. A senior Nepali official involved in the negotiations confirmed that even as the framework was signed, Nepal remained insistent that it would not accept interest rates exceeding those of multilateral and bilateral donors — but whether that position will hold in individual project agreements, and what enforcement mechanisms exist, remains unknown to the public and to parliament.
Nepal’s parliament has the legal authority to demand full disclosure of sovereign loan terms before commitments are made. Exercising that authority requires a government willing to press Beijing on the point, and a coalition stable enough to follow through consistently. Nepal’s political landscape — marked by frequent government changes, shifting coalitions between parties with divergent positions on China, and a tendency for executive decisions on sensitive bilateral matters to outpace parliamentary debate — makes neither condition easy to sustain. What the December 2024 framework represents in practice, rather than in carefully negotiated terminology, will become clear only when the first project agreements are signed. Those details, too, may not be made public.
