Has scrapped US$2.5 billion Nepal hydro dam deal with Chinese state firm hurt Beijing’s Himalayan ambitions?
Decision expected to be a blow to Beijing’s efforts to expand its clout in Himalayan country through infrastructure
Nepal is expected to formally cancel a deal with a Chinese state-owned company to build one of the country’s biggest hydropower plants, according to its deputy prime minister.
In a tweet on Monday afternoon, Deputy Prime Minister Kamal Thapa said the plan to award the US$2.5 billion hydroelectric project to China Gezhouba Group had been scrapped.
“In the meeting of the Board of Ministers held today, the agreement with the Gezhouba Group in respect of Budhi Gandaki Hydro Electric Project was found in an irregular and thoughtless manner and rejected under the direction of Parliamentary Committee,” he said.
The two parties signed a memorandum of understanding in June to build the 1,200MW hydropower plant about 80km from Kathmandu, inking the deal less than a month after Nepal formally agreed to take part in Beijing’s “Belt and Road Initiative”.
The agreement’s cancellation is expected to be a major setback for Beijing as it seeks to expand its influence in the Himalayan country through the massive infrastructure drive.
Dinesh Kumar Ghimire, a spokesman for Nepal’s Ministry of Energy, said he believed the decision was final.