Nepse up by 6.89 points as market reopens

The stock market increased as the market reopens after the festival holiday.
The Nepal Stock Exchange (Nepse) index rose by 6.89 points today, the first day of trading after a week-long Dashain holiday. Rise in demand for shares after festival has pushed thr share marke index to rise slowly. Nepse opened at 1,556.35 points and closed at 1563.24 points today.
Despite the rise in Nepse, the secondary market witnessed a low transaction volume. According to Nepse, the value of share transactions totalled Rs 140 million with 269,776 shares changing hands. The figure is almost one-fifth of the usual daily turnover of Rs 700-800 million seen before the Dashain festival.
Almost all the groups posted gains in their indices today. The hydropower group made the highest gain of 63.84 points to close at 1,858.38 points. It was followed by hotels, insurance companies, commercial banks and trading. 

ADB approves over $210 million in LEAP Financing

The Asian Development Bank (ADB) has approved two projects worth over $210 million in debt financing from the Leading Asia’s Private Infrastructure Fund (LEAP) in its first year of operation. ADB expects these initial projects will generate about $1.4 billion in total financing, including $264.5 million from ADB’s own capital and an additional $890 million from cofinancing partners.
ADB is also actively processing over $500 million of LEAP debt and equity transactions for private infrastructure throughout the region. This includes potential projects in India, Indonesia, Myanmar, Pakistan, the Philippines, and Thailand.
LEAP is one of ADB’s cofinancing vehicles dedicated to private sector infrastructure in Asia and the Pacific. The Japan International Cooperation Agency (JICA) supports the fund, launched in August 2016, through a $1.5 billion equity commitment. Combined with ADB’s own capital and that of commercial partners, the fund is expected to provide financing of at least $6 billion and enables ADB to boost support for quality and sustainable infrastructure.
“We are very pleased with the initial progress of the fund, which has made a tangible impact on private infrastructure delivery in the region within the first 12 months,” said senior vice president of JICA Yasushi Kanzaki.
Over the past year, LEAP financing for two transactions has been approved, with the projects now in their construction phase. "LEAP is amplifying the impact we can have on our developing member countries,” said ADB vice president for Private Sector and Cofinancing Operations Diwakar Gupta. “The initial renewable energy projects are helping the region in its transition to a low-carbon economy.”
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members, 48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.

EU releases €800 000 to support victims of floods in Nepal

The European Union (EU) is providing €800 000 (Rs 98.5 million) in emergency relief funding to assist the most affected populations, in response to the widespread floods that have swept across large parts of Nepal in recent weeks. This allocation is part of a larger regional allocation of €2 million in response to floods in South Asia.
"The countries in South Asia are facing some of their worst floods in decades, which are resulting in a large-scale humanitarian situation affecting millions. It is especially in these hard times that EU solidarity makes a difference: our support will reach those most in need and help them recover from the devastating losses they have suffered," saidCommissioner for Humanitarian Aid and Crisis Management Christos Stylianides.
EU support will provide life-saving assistance, prioritising shelter, food assistance, water and sanitation, health and protection to those affected by the floods, while restoring the safety and dignity of the most vulnerable populations. The funding will be channelled through the European Commission’s European Civil Protection and Humanitarian Aid Operations department (ECHO).
Nepal is witnessing its worst flooding in 15 years, which is affecting almost two million people. Some 160 people lost their lives, 20 900 families are still temporarily displaced and at least 235 000houses have been damaged or completely destroyed. Because of the massive loss of livestock, people are now dependent on food distributions; however, so far these have not been sufficient to meet the basic needs of the most vulnerable population.
Since 2001, the European Union has invested over €24 million to fund Disaster Risk Reduction and preparedness programmes in Nepal, supporting - among others - initiatives such as the building of flood-resistant infrastructures and the reinforcement of Early Warning Systems.

2019 DV Programme opens

The application period for the 2019 Diversity Visa (DV) programme opens on October 3 (9:45 pm nepal time) and closes on November 7 (10:45 pm Nepal time).
The American Embassy in Kathmandu has said that there is no fee to enter the DV lottery.
Likewise, the Embassy has also recommended against using a consultant to assist with application. "One can consider using a family member, friend or other trusted person, if one need assistance," it said, adding that no matter, who provides assistance, one is solely responsible for one's own application.
One has to apply online as entries for the 2019 Diversity Visa lottery must use the electronic Diversity Visa entry form (E-DV) during the registration period.
"When registering, one must list one's spouse and all of unmarried children under the age of 21 at the time of application," it said, suggesting that submissions without the inclusion of family members will make entry invalid. "A person can submit one application only."
Likewise, one has to submit a recent photo and the entries submitted with the same photo from the last DV year will be disqualified.
After submitting, the DV form, one has to print and save confirmation number as this number is the only way to check status on or after May 1, 2018 to check the result.
The Embassy has also reminded that even one is selected as a DV winner, it does not guarantee that one will receive a visa.

NEA terminates Dhalkebar contract

Nepal Electricity Authority (NEA) has terminated the contract of Dhalkebar substation as the Chinese contractor had intentionally delayed the works of the project.
The project is critical for Nepal-India electricity trade, and the termination of contract could lead to load shedding. But the Central China Power Grid International Economic and Trade – the contractor of the substation – had delayed the works since long putting forward various demands, which are not related with the contract. The contractor had asked NEA to remove the component of Inaruwa and Hetauda substations from the project or provide actual additional cost that accrue while implementing the project.
According to the contract between NEA and China Power Grid International Economic and Trade – in June 2014 – the substation was supposed to have been completed by September 2015. But the deadline was continuously pushed back as the contractor had sought additional incentives to complete the project on time.
Nepal plans to raise import of electricity via Muzaffarpur-Dhalkebar cross-border electricity transmission line. The country will be able to import an additional 100 megawatts (MW) of electricity on top of the existing 145 MW from India after the Dhalkebar substation – Rs 1.42 billion project under loan assistance of the World Bank – has been charged at 220 kV, which is critical to end load-shedding.
"The contractor has hardly worked for seven months though the construction work had started one-and-a-half years ago,” said project manager of Dhalkebar substation Radhesharan Mahato. "Some 85 per cent works of the project have been completed."
The NEA has already seized the bank guarantee of the contractor. However, the power utility has yet to select the next best option to expedite the project. After termination of the contract, NEA has a few options, like it can call for request for proposal (RfP) from the shortlisted companies, open a rebidding process or hand over a direct contract for remaining works to one of the earlier shortlisted companies.
Nepal-India energy secretary level talks held in February had also taken into account that the project will be completed by August this year.
The contractors normally generate profit from the delivery of equipment despite low bidding for the field level works and they seem reluctant to complete the project works on time. The NEA has also proposed to release 50 per cent of the payment for equipment only after the completion of works to make the contractor liable to complete the project works within the desired time.
Especially for projects funded by the World Bank, the executing agency has to release the payment for equipment to the contractor, after it submits the shipment order of the equipment.

India removes GST on supply of services for transit cargo

India has removed the goods and services tax on services provided by Indian service providers for transit cargo like transportation, insurance, shipment, container freight station and cargo handling charges.
Indian Finance Ministry – issuing a notification – informed about the GST waiver considering these services provided by the Indian service providers as ‘service export’.
Joint secretary at the Commerce Ministry Rabi Shanker Sainju confirmed that India has waived the GST on supply of services associated with transit cargo to Nepal and Bhutan – landlocked countries – through a recently published Gazette notice.
The new provision introduced by government of India had come into force from September 29. "Nepali traders making payments in Indian currency to procure aforesaid services will not have to pay GST now," he said, adding that Indian government had earlier levied GST since July 1.
Since the Indian government introduced the GST, services like transportation, cargo handling and container freight station had became costlier as the GST rule recognised and exempted GST only, if the service procurer made payment in convertible foreign currency. Though GST is not applicable on export of goods and services, it recognised service export only if the Indian supplier received payment in convertible foreign currency.
Nepal had requested the Indian government for GST waiver citing that services procured by Nepali traders in India should be taken as service export. Likewise, Nepali private sector – during the Prime Minister Sher Bahadur Deuba's India visit – had also requested the Indian authorities to waive the GST on Indian service providers for transit cargo like transportation, insurance, shipment, container freight station and cargo handling charges as it is against the Nepal-India Bilateral Trade and Transit Agreement. The Indian government officials, especially then Commerce Minister Nirmala Sitharaman – currently Defence Minister – had with Nepali private sector vowed to waive GST, if it is against the bilateral agreement.
The central bank encourages traders to make payments in Indian currency for transactions in India to prevent chances of embezzlement of convertible foreign currency like US dollar by Nepali traders.
Nepal has requested GST waiver for all services procured by Nepalis in India, like software, business process outsourcing, knowledge process outsourcing and other technical services as well, according to Sainju. "However, India has amended GST rules only for services related to transit cargo that includes road and rail transportation, shipping line charges, cargo handling charges."

World Bank to continue support for technical education and vocational training

The World Bank has approved a $ 60 million credit to support a second phase of the Enhanced Vocational Education and Training Project in Nepal (EVENT II).
EVENT II is designed to help the country improve equitable access to market relevant training programs and to strengthen the delivery of Technical Education and Vocational Training (TEVT), according to a press release issued by the multilateral development partner.
In Nepal, TVET is an important intermediary between youth and the labour market through the provision of pre-employment skills. Between 450,000 and 500,000 Nepali youth come of working age every year, most of whom will enter either the domestic or the foreign labor market with limited education and skills.
On the other hand, the annual intake capacity in short-term and long-term TVET programmes in the country was between 100,000 and 120,000 in 2016. While TVET has grown in size over time with formal and informal providers across a variety of government and non-government entities, it continues to face the challenges of quality training for domestic and foreign labour markets, inclusion and cohesion.
“Skill development of the workforce through investment in human capital including technical and vocational education and training are critical for the successful implementation of the country’s emerging jobs agenda,” said the World Bank’s country manager for Nepal Takuya Kamata.
EVENT II is designed to support the TVET sector in Nepal at different levels, the system, the institution, and the individual. Activities include upgrading the quality of TVET facilities, supporting key human resources that are critical for the quality of service delivery, improving access for disadvantaged groups, supporting missing links between training and placement to help youth find work, improving the availability of information linking skills supply and demand, and improving governance through performance-based funding of training providers.
The project will also support migrants through training and skill testing and certification.
“While there is substantial underemployment and informal employment dominates, an increased focus on skills and employability will help Nepal benefit from its potential youth dividend,” said senior economist and the Bank’s Task Team Leader for the project Sangeeta Goyal.