JICA, Dolma Impact sign $10 million investment pact to aid growth

Japan International Cooperation Agency (JICA) today signed a $10 million investment agreement with Dolma Impact Fund II, focusing investments in renewable energy, technology and healthcare in Nepal.

The fund also contributes to gender equality and fulfills the criteria in the ‘2X Challenge: Financing for Women’, an initiative adopted by the G7 development finance institutions, including JICA, on the occasion of the G7 Leaders' Summit in June 2018, according to a press note issued by JICA and Dolma Impact Fund, jointly. 

According to Dolma Impact Fund, the project will contribute to sustainable development goals – Goal 5 (Gender equality), Goal 7 (Affordable and clean energy), and Goal 8 (Decent work and economic growth).

Chief executive officer of Dolma Impact Fund Tim Gocher, while addressing the signing ceremony in Kathmandu through the virtual medium, said Nepal would see a huge increase in foreign direct investments in the coming future that would create more jobs, prosperity and stronger industrial development.

The Dolma Impact Fund has $100 million under management and has invested in 12 companies across energy, healthcare and technology.

“Nepal needs more aid in hospitals, trained doctors and nurses and medicines manufactured domestically, so that the country can support itself in a future crisis,” Gocher said, adding that Dolma is further investing in renewable energy apart from the existing 46.5 megawatt project (MW), with JICA. “We just do not promote and build renewable energy, we promote the capital markets too, so that more investors come into the sector.”

The Fund has invested in companies like CloudFactory, Fusemachines, Sastodeal, Upaya City Cargo, and Foodmandu. “About 15,000 employees have been created in companies that the Fund has invested in,” said Gocher.

“This is our first partnership with an investment partner in Nepal,” senior deputy director-general of the Private Sector Partnership and Finance Department of JICA Jin Wakabayashi said, adding that Dolma Impact Fund is a leading private equity fund and JICA is excited to partner with such a fund and contribute to the development of Nepal.

JICA has been supporting the Investment Board of Nepal to strengthen sources for investments, he said, adding that JICA has also been in technical cooperation for hydropower projects. “Recently, JICA has started a new technical cooperation project to support entrepreneurs in Nepal.”

JICA's investment will be mainly utilised for equity investment in healthcare companies, IT and digital companies, and renewable energy projects in Nepal. JICA’s investment is part of the final close of Dolma Impact Fund II, which brings the fund corpus to $71.96 million.

“Nepal is facing the challenge of a hollowing out of industry caused by the increased number of migrant workers, which, in turn, is due to a lack of promising domestic industries and job opportunities in Nepal,” the press note reads, adding that the fosterage of promising industries such as healthcare and the IT and digital sector, therefore, is urgently needed in Nepal. 

Dolma Fund Management contributes to the development of the stock market and the private equity fund market in Nepal.

Although Nepal experienced a temporary economic downturn due to the earthquake in 2015, the economy has revived since then and the country is now expected to graduate from the Least Developed Countries (LDC) category by 2026. On the other hand, Nepal is facing the

challenge of a hollowing out of industry caused by the increased number of migrant workers, which in turn is due to the lack of promising domestic industries and job opportunities in Nepal.

Therefore, the fosterage of promising industries such as healthcare and the IT/digital sector is urgently needed in Nepal, the press note reads. “In some areas, however, Nepal has a natural advantage, being blessed with abundant water resources and an economically viable hydropower generation potential estimated at around 42,000 MW. Hence, Nepal is expected to expand its renewable generation capacity to contribute to the reduction of greenhouse gas emissions in South Asia.”

DFM manages impact investment funds that promote industrial development, employment creation, and renewable energy development.

Dolma Impact Fund invests $1 million in Sastodeal

Dolma Impact Fund has made an additional investment of one million dollars in Sastodeal.com.
Founded in 2011, Sastodeal – one of the leading local e-commerce companies in Nepal – has raised $1 million from Dolma Impact Fund alongside other existing shareholders as part of an ongoing fundraising round. The growth investment will be used towards reaching Sastodeal’s milestone target of achieving Rs 1 billion in annual revenues within the next 18 months, according to a press note issued by the company.
One of Nepal’s biggest and most popular online shopping platforms, the company was growing at near-about 300 per cent before Co -19 hit Nepal, the press note reads, adding that during the lockdown, Sastodeal saw new customer numbers spike with e-commerce booming.
“We worked as part of a government taskforce, along with other e-commerce providers, to deliver essentials during lockdown,” said chief executive officer (CEO) Amun Thapa. “Now that the lockdown is easing gradually, we can see there is more demand than ever as new customers are now familiar with online shopping.”
Dolma Impact Fund – the first international private equity fund investing in Nepal – is already a shareholder in Sastodeal. They have now approved a significant fresh investment, alongside some existing local shareholders, to fund the next stage of growth. This will include an expansion of product categories, talent acquisition, core operations, vendor empowerment, and an expansion to other regions in Nepal.
“One thing that was obvious during lockdown was the limitation of catering to customers outside the Kathmandu Valley,” Thapa said, adding that the investment will enable us bring the benefits of e-commerce to both consumers and businesses to a much wider audience.
“This is a high growth industry which performed a vital task during lockdown,” chief executive officer of Dolma Impact Fund Tim Gocher said, adding that the new investment reflects the company’s belief in the Sastodeal team and the company continued investment in Nepal’s technology sector, alongside healthcare and renewable energy investments. “We are delighted to lead this round of financing alongside local partners.”
Dolma Impact Fund is already a shareholder in Sastodeal. They have now approved a significant fresh investment, alongside some existing local shareholders, to fund the next stage of growth. This will include an expansion of product categories, talent acquisition, core operations, vendor empowerment, and an expansion to other regions in Nepal. Sastodeal also has plans to reveal a big partnership with an outside firm in the upcoming days.
“E-commerce is surely an attractive space for investments in India and countries around the globe and we are also witnessing similar trends in Nepal,” Thapa adds.
Sastodeal also has plans to reveal a big partnership with an outside firm in the upcoming days. “The partnership will be a game-changer for Nepal and we hope the announcement will get the entire nation excited,” CCO Amitesh Roy said.
Meanwhile, the company has also stated that Sastodeal is in talks with various local and international investors to close this fundraising round in a few months.

Shaping agile governance

The Global Shapers Community Kathmandu Hub today – hosting their third Shape Talk event – discussed Agile Governance, especially in the context of emerging businesses.
With some 130 participants, the moderator Princi Koirala, on the occasion, started the session with a question, ‘what is agile?’
Agile, while a term used in technology, is unused in other businesses. “We are in an era where the father knows best, the entrepreneur knows best, doesn't work anymore,” the founder and managing director of Safal Partners Ashutosh Tiwari said, on his definition of ‘agile’, said that it's better to think ‘I know a little bit’, now let the system teach me. “What I would like to propose is regulation for public welfare,” Tiwari said, asking a question, “has a company added to the public welfare of the society? Pathao, Tootle, Foodmandu for example?”
Likewise, founder of Karkhana – an education company encouraging hands on learning – Sakar Pudasaini, on the occasion, said that agile means shorter and shorter sessions of planning. “When building software, there's a lot of deviation outside the plan, so developers thought how about we plan for even shorter sessions,” he said, adding that this is ‘agile’ across different industry.
Starting your own business requires capital, a fact that is very important and must not be undermined, said Tiwari, who also recommended that people not quit their jobs unless they had tested their ideas.
As the recent advances in technology have the potential to fundamentally redefine modern life by giving rise to new business models and industries, the panel discussed both challenges and opportunities for emerging businesses.
“I think finding alternatives in local products like jute, could not only help the environment but also reduce the trade deficit that we have,” said chief executive of Himalayan Climate Initiative (HCI) Shilshila Acharya, said in the context of starting new businesses. “However, startups aren’t easy and may require a lot of sleepless nights and turmoil,” he shared his experience with Karkhana.
“The number one reason that companies fail in Nepal is because of working capital management,” said investment director of Dolma Impact Fund Shabda Gyawali. “Cash conversion is slow in Nepal.”
The panel ended with a question on what steps the government could take immediately. Panelists agreed that the government could better implement policies in place instead of creating more policies, many that can be conflicting. “I would like the government to increase the trust between the private sector and the government,” said Gyawali.

Dolma Impact Fund celebrates five years of investing in the country

The Dolma Group held an event today to celebrate five years of investing in Nepal, the launch of Dolma Consulting, and the pioneering DFID-backed work of Dolma Himalayan Energy.
The only international private equity fund dedicated to Nepal, Dolma Impact Fund I (DIF) has invested in two hydro projects, two solar projects, three technology companies and two healthcare companies, creating sustainable employment for over 5,000 Nepalis.
The Fund is the private equity arm of the Dolma Group, founded by Prof Tim Gocher.
“The Fund has pioneered the impact investment and private equity market in Nepal and is able to showcase the tremendous economic, social and environmental impacts of foreign direct investment (FDI) on economic growth, productivity and employment generation in Nepal,” Prof Gocher has been quoted as saying in a media release. “DIF has provided a credible track record of international private equity investment that we hope stimulates further much-needed FDI, and the knowledge transfer that comes with it, into the country.”
To complement the group’s expertise in successfully raising and investing FDI in Nepal, Dolma Consulting – headed by former chief executive of Standard Chartered Bank Nepal and managing director Joseph Silvanus – was formally launched today.
“The private sector has reached a level of sophistication that demand for international capital is growing, from banks, corporates and infrastructure projects,” Silvanus said, adding that Dolma Consulting offers clients a full suite of services to enable them to raise and deploy international capital. “We are the path for Nepal’s companies to raise international equity, debt, and blended finance to achieve their domestic and global goals.”
At the event, managing director of Dolma Himalayan Energy (DHE) Sandip Shah highlighted the innovative and bespoke Peak Energy Management (PEMa) system that combines solar PV and Energy Storage System (ESS) to ensure an accessible and affordable supply of power to Nepal’s grid and its people. “Using these technologies, Dolma Himalayan Energy will provide the same crucial service as hydro storage plants, dispatchable power in the dry season, including at peak hours,” he said, “The big difference is that our plants can be constructed in one year, a fraction of the time required for hydro plants.”
Dolma Himalayan Energy can, therefore, rapidly reduce Nepal’s reliance on Indian electricity imports, he added.