Sunday, May 5, 2019

Foreign investment pledges witness steep drop to one-third

The two-third majority communist government led by Prime Minister KP Sharma Oli seems not very favourite for the foreign investors as the foreign investment pledges in the first nine months of the current fiscal year 2018-19 dropped sharply to one-third of the amount pledged during the same period of the last fiscal, also due to lack of mega projects like hydropower plants in the review period.
Foreign investors made investment commitments totalling Rs 11.57 billion during the period mid-July to mid-April of the current fiscal year, according to the Department of Industry (DoI) that had recorded foreign investment pledges amounted to Rs 35.35 billion in the same period in the fiscal year 2017-18.
“The department registered some 268 projects with foreign capital during the review period, up from 229 last year, which is a 17 per cent rise,” it added.
The steep decline in investment pledges was also a reflection of the reluctance of investors to put money in mega hydro projects. According to the department, none of the foreign investors proposed to invest in the energy sector while the country received investment proposals of Rs 22.3 billion in the energy sector, during the same period in the last fiscal year, which have proposed to generate 9,202 jobs.
Though, the number of projects and volume of investments are expected to increase after the new Foreign Investment and Technology Transfer Act (FITTA) is issued but there has not been any viable project which the foreign investors are interested in, especially after the controversy of Budhigandagi Hydropower.
Compared to the last fiscal year, tourism and the service sector accounted for the largest portion of investment pledges in the current fiscal year. “Investors proposed to invest Rs 3.76 billion in 87 tourism businesses and Rs 1.85 billion in 85 service enterprises,” the department data revealed.
Apart from service sector, agriculture, forestry, information technology, manufacturing and mining are some of the key sectors that have attracted foreign investors. “Investors from 30 countries proposed to invest in Nepal in the first nine months of the current fiscal year,” the date revealed, adding that financiers from India, China and Singapore topped the list of potential investors. “Indian investors are planning to inject Rs 5.59 billion in 45 projects, up from Rs 3.99 billion in 35 projects last year, followed by Chinese investors have proposed investments of Rs 2.31 billion in 110 projects.”
The data also revealed a remarkable fall in investment pledges from China as in the same period of the last fiscal year, Chinese investors had pledged Rs 28.82 billion. “Investors from Singapore proposed to invest Rs 1.5 billion in five projects in the first nine months of the current fiscal year.”

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