India’s PM Modi seeks to buffer China’s influence during trip to Nepal

Narendra Modi held talks with Nepal’s prime minister Sushil Koirala during which he pushed to revive stalled power projects including developing hydropower plants using Nepal’s abundant water resources and Indian investment.

Nepalese prime minister Sushil Koirala, centre left, welcomes Indian prime minister Narendra Modi, on his arrival in Kathmandu. Prakash Mathema / AFP / August 3, 2014

KATHMANDU // India’s prime minister Narendra Modi yesterday sought to secure energy deals with Nepal at the start of a visit aimed at boosting New Delhi’s influence in a region increasingly wooed by Beijing.

In an address to Nepal’s parliament, Mr Modi announced US$1 billion (Dh3.67bn) as a concessional line of credit to the nation as he attempted to strengthen economic and diplomatic ties.

“Nepal can free India of its darkness with its electricity,” said Mr Modi, whose government has pledged to end the country’s frequent blackouts.

“But we don’t want free electricity, we want to buy it. Just by selling electricity to India, Nepal can find a place in the developed countries of the world.”

Mr Modi said India and Nepal have relations as “old as the Himalayas and the Ganges”, after he arrived in Kathmandu for the first visit by an Indian prime minister in 17 years.

The right-wing nationalist has sought to shore up support with India’s neighbours since sweeping to power at national elections in May, in a bid to check China’s sway in the region.

Mr Modi held talks with Nepal’s prime minister Sushil Koirala during which he pushed to revive stalled power projects including developing hydropower plants using Nepal’s abundant water resources and Indian investment.

Earlier proposals to develop joint ventures between the two countries have faced delays because of disagreements over perceived threats to Nepalese sovereignty, allowing rival China to step into the breach.

Ram Sharan Mahat, Nepal’s finance minister, said the two leaders agreed to fast-forward a long-stalled plan to develop a 900-megawatt project on Nepal’s Karnali river to provide power to both energy-starved countries.

The joint venture signed between Kathmandu and Indian infrastructure giant GMR in 2008 would be approved and signed within 45 days, Mr Mahat said.

During the bilateral talks, Mr Modi also offered $1bn worth of concessional loans to help develop Nepal’s infrastructure.

Mr Modi “offered $1 billion line of credit towards our infrastructure, including hydropower and roads”, he said.

They also agreed to commence work on a 6,480-megawatt hydropower plant on the Mahakali river, part of a treaty originally signed in 1996.

Although New Delhi traditionally has exerted huge influence in Nepal, Beijing has recently intensified its engagement, pumping billions of dollars into infrastructure projects ranging from roads to hydropower plants.

Mr Koirala greeted Mr Modi at Kathmandu’s international airport, where he received a 19-gun salute while an army band played.

A devout Hindu, Mr Modi will offer prayers today at the Pashupatinath temple complex, a Unesco World Heritage site near Kathmandu that attracts tens of thousands of pilgrims every year.

During his speech to parliament, Mr Modi urged Nepal’s politicians to work together to end a prolonged deadlock that has seen the constituent assembly, which also serves as parliament, struggle to draft a new constitution for the country.

“A constitution always unites, it never divides,” Mr Modi said.

Nepal has endured prolonged political limbo since 2006 when former rebel Maoists laid down arms and signed a peace deal, paving the way for constituent assembly polls two years later.

* Agence France-Presse