Investment Board of Nepal approves investment worth Rs 8.84 billion

Investment Board of Nepal (IBN) has approved an investment of Rs 8.84 billion for the development of the 54 megawatt (MW) Lower Apsuwa Hydropower Project.

A Board meeting held today took the decision to approve the investment, IBN spokesperson Pradhumna Prasad Upadhyay confirmed.

Likewise, the IBN has decided to form a dialogue committee under the leadership of the CEO to table a proposal on project development agreement (PDA), financing modality and other issues regarding the West Seti Hydropower Project. 

The meeting chaired by the chairman of the IBN Prime Minister KP Sharma Oli has also entrusted the Board's CEO to submit the feasibility study report of Kathmandu-Hetauda-Birgunj podway project and development and operation of Panchkhal Special Economic Zone (SEZ) as well as provide the survey license for the projects.

The IBN meeting also provided approval to the developer company Karnali Transmission Company for the Environmental Impact Assessment (EIA) and feasibility study of the new route alignment for the development of transmission line for the Upper Karnali Hydropower Project of 900 MW.

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel, Physical Infrastructure and Transport Minister Devendra Dahal, National Planning Commission (NPC) vice chairman Prof Dr Shivaraj Adhikari, chief secretary Eaknarayan Aryal, central bank governor Dr Bishwo Nath Paudel and other top ranking officials attended the meeting.

लगानी सम्मेलनलाई फास्ट ट्रयाकमा कानुन संशोधन गर्ने तयारीमा सरकार

 काठमाडौं । सरकारले लगानी सम्मेलन अगावै नेपालमा लगानीका लागि अवरोध मानिएका कानुन संशोधन गर्ने जनाएको छ ।

कानुन संशोधनको लागी निजी क्षेत्र समेतको सहभागितामा गठित नीतिगत, संरचनागत एवं प्रक्रियागत सुधारका लागि सुझाव कार्यदलले सूची बुझाइसके पनि सरकारको तर्फबाट ती कानुन संशोधनका लागि प्रतिनिधि सभामा लैजान बाँकी छ ।

आउँदाे वैशाख १६ र १७ गते (अप्रिल २८ र २९) गते आयोजना गर्न लागिएको लगानी सम्मेलन आयोजक समितिअन्तर्गत मौजुदा नीतिगत, संरचनागत एवं प्रक्रियागत सुधारका लागि सुझाव कार्यदलले दिएको संशोधन सुझावलाई प्रतिनिधि सभामा लगेर छलफल गरि पारित गर्न सरकारसँग दुई महिना पनि बाँकी छैन ।

लगानी सम्मेलनको अघिल्लो दिन कानुन संशोधन गरेर लगानीकर्ता कन्भिन्स हुन नसक्ने भएका कारण समयको दबाब बढ्दै छ। त्यसैले सरकारले ‘लगानी सहजीकरण गर्न केही नेपाल ऐन संशोधन गर्न बनेको विधेयक, २०८०’ मन्त्रिपरिषदबाट प्रतिनिधि सभामा लैजाने तयारी गरेकाे हाे ।

नेपाल उद्योग वाणिज्य महासंघका अध्यक्ष तथा नीतिगत, संरचनागत एवं प्रक्रियागत सुधारका लागि सुझाव कार्यदलमा निजी क्षेत्रका प्रतिनीधि चन्द्र ढकाल सरकारले फास्ट ट्रयाकमा कानुन संशोधन प्रकृया अगाडि बढाउने प्रतिबद्धता जनाएको बताउँछन्।

उनका अनुसार निर्देशक समितिले छलफल गरेर कानुन सुधारका सुझाव मन्त्रीपरिषदमा पठाइने छ । मन्त्री परिषदले प्रतिनिधि सभामा पेश गर्ने तयारी गरेको छ ।

कुनै पनि देशका लगानीकर्ताले लगानी गर्दा आफ्ना वस्तु तथा सेवाको सम्भाव्य बजार, बजारमा प्रवेश तथा नाफा फिर्ता लैजान सहजीकरण, कानुनी र प्रशाशनिक झंझट भए नभएको तथा राजनीतिक जोखिम हो । प्रतिस्पर्धी वस्ताु तथा सेवाको लागि नेपालमा नेपालको मात्रै नभएर छिमेकी देश भारत तथा चीनको बजार पनि छ । तर, कानुनी तथा प्रशासनिक झमेला भने नेपालमा बढि भएको स्वदेशी र विदेशी लगानीकर्ताको ठम्याइ छ ।

त्यसैले सबैभन्दा पहिला कानुन संशोधनमा जोड दिनु पर्ने लगानीकर्ताहरु बताउँछन् । त्यसैले नेपालमा लगानी प्रवर्द्धनका लागि लगानी बोर्डको कार्यालयलाई कानुनी र संरचनागत अधिकारसहित स्वायत्त तथा अधिकारसम्पन्न बनाउने र हाल अन्तर मन्त्रालय तथा निकायमा छरिएर रहेका लगानीका कानुनलाई एकीकृत बनाएर वा विन्डो पोलिसी (एक प्रवेशद्धार) को नीति चाहिने हाल नेपालमा लगानी गरिरहेका लगानीकर्ताहरु बताउँछन् । उनीहरुका अनुसार प्रतिफलको हिसाबले नेपाल लगानीको लागि उपयुक्त मुलुक भएपनि कानुनी तथा प्रशाशनिक झंझट तथा त्यसले सिर्जना गरेको अनिश्चयको वातावरणमा नयाँ लगानीकर्ता नेपाल आउन हच्केका हुन् ।

त्यसैले कानुनमा सुधारका लागि सिफारिस गर्न गठिन कार्यदलले एक दर्जन ऐन तथा नियमावली संशोधन गर्न सिफारिस गरेको छ । कार्यदलले औद्योगिक व्यवसाय ऐन २०७६, विदेशी लगानी तथा प्रविधि हस्तान्तरण ऐन २०७५, विशेष आर्थिक क्षेत्र ऐन २०७३, वन ऐन २०७६, राष्ट्रिय निकुञ्ज तथा वन्यजन्तु संरक्षण ऐन, २०२९ लगायत ऐनका व्यवस्था संशोधनको सुझाव दिएको छ ।

यसका साथै, भूमिसम्बन्धी ऐन २०२१, जग्गा प्राप्ति ऐन २०३४, वातावरण संरक्षण ऐन २०७६, विद्युतीय कारोबार ऐन २०६३, नागरिक उड्डयन ऐन, २०५३ का व्यवस्थामा पनि संशोधन गर्न सुझाव दिएको छ । विदेशी लगानी तथा प्रविधि हस्तान्तरण नियमावली, २०७७ र वन नियमावली, २०७९ मा समेत संशोधन तथा विद्यमान अन्य केहि ऐन कानुन परिमार्जनका लागि कार्यदलले सुझाव दिएको छ ।

लगानी सम्मेलन निर्देशक समितिको विहीबार बसेको तेस्रो बैठकले नीति, कानून तथा संरचनागत सुधार कार्यदलका संयोजक एवं प्रधानमन्त्री तथा मन्त्रिपरिषद् कार्यालयका सचिव अर्यालको समितिले बुझाएका ती कानूनी तथा नीतिगत सुधारको प्रतिवेदनका बारेमा छलफल गरेको थियो ।

विभिन्न देशका लगानीकर्तालाई नेपालमा बोलाएर लगानी गर्नका लागि आश्वस्त पार्न सरकारले देखाउने पत्यारिता आधार तयार गर्नेक्रममा पहिलो आवश्यकता मौजुदा कानुनमा सुधार नै भएको निर्देशक समितिको पनि निक्र्यौल छ ।

त्यसैले बैठकमा अर्थमन्त्री तथा निर्देशक समितिका संयोजक डा. प्रकाशशरण महतले नेपालमा लगानी गर्न अन्तरराष्ट्रिय लगानीकर्ताबाट चासो प्राप्त भइरहेको बताउँदै नेपाली लगानीकर्ता एवं गैरआवासीय नेपालीलाई समेत आकर्षित गर्न कानूनी र नीतिगत सुधारमा सरकारले कुनै कसर बाँकी नराख्ने बताए ।

सचिव अर्यालले निर्देशक समितिमा प्रस्तुत गरेको कानूनी तथा नीतिगत सुधारका सम्बन्धमा तयार भएको प्रतिवेदनमा समितिका केहि सुझाव भए समावेश गरेर ‘लगानी सहजीकरण गर्न केही नेपाल ऐन संशोधन गर्न बनेको विधेयक, २०८०’ मन्त्रिपरिषद्को स्वीकृतिपश्चात् अनुमोदनका लागि संसद पठाउने तयारी गरिएको महासंघका अध्यक्ष ढकालले जानकारी दिए ।

कार्यदलले औद्योगिक व्यवसाय ऐन, २०७६ मा स्टार्टअप उद्यम तथा व्यवसायको परिभाषा थप गर्न आवश्यक रहेको, थप प्रोत्साहन, छुट, सुविधा, सहुलियत प्रदान गर्न सक्ने व्यवस्था ऐनमा राख्न सुझाव दिएको छ भने विदेशी लगानी तथा प्रविधि हस्तान्तरण ऐन, २०७५ को दफा २ को खण्ड (ग) मा संशोधन गरी गैरआवासीय नेपालीको परिभाषा संशोधन गर्न सुझाव दिएको छ ।

यसैगरि, विशेष आर्थिक क्षेत्र ऐन, २०७३ संशोधन गरि विशेष आर्थिक क्षेत्रमा स्थापना भएका उद्योगले उत्पादन सुरु गरेको तीन वर्षसम्म कम्तीमा १५ प्रतिशत र छ वर्षभित्र कम्तीमा ३० प्रतिशत उत्पादित वस्तु वा सेवा निर्यात गर्नुपर्ने सुझाव कार्यदलले दिएको छ ।

नेपालमा लगानकिा लागि वन ऐन ठुलो तगारोको रुपमा रहेको स्विकार्दै वन ऐन, २०७६ मा ‘वन पैदावार’को परिभाषामा संशोधन गर्न पनि कार्यदलले सुझाव दिएको छ । वनसँगै जोडिएर आउने राष्ट्रिय निकुन्ज तथा वन्यजन्तु संरक्षण ऐन, २०२९ मा पनि विकास निर्माणलाई सहजीकरण गर्न तथा भूमिसम्बन्धी ऐन, २०२१मा रहेको हदबन्दी छुटलाई नियमन गर्नेसम्बन्धी विशेष व्यवस्थामा संशोधन गर्न पनि कार्यदलको सुझाव छ ।

वातावरण सरंक्षण ऐन, २०७६, विद्युतीय कारोबार ऐन, २०६३, नेपाल नागरिक उड्डयन प्राधिकरण ऐन, २०५३ लगायतमा शंसोधन गर्न कार्यदलको सुझाव छ ।

यसअघि पनि निजी क्षेत्रले यसअघि नै २८ कानुन संशोधन, ५ खारेज तथा ३ वटा नयाँ बनाउन सरकारसँग माग गरेको थियो । नेपाल उद्योग परिसंघ (सीएनआई)ले कानुनी समस्या र त्यसले पारेको नकारात्मक प्रभावका कारण जम्मा ३६ वटा कानुन संशोधन, खारेज र नयाँ बनाउने विषयमा सरकारलाई औपचारिक प्रस्ताव गरेको थियो ।

सरकारले कनुनमा सुधार गर्दा अर्थतन्त्र समृद्ध हुने र आर्थिक गतिविधि बढ्ने अनि नेपालमा रोजगारी सिर्जना हुने निजी क्षेत्रको ठम्याइ छ । अन्यथा नेपालले तीव्र आर्थिक वृद्धिको लक्ष्य हासिल गर्न नसक्ने, लगानीको वातावरण नबन्ने र औद्योगिकीकरण हुन नसक्ने ठहर निजी क्षेत्रको छ ।

लामो समयदेखि थाँती रहेका कानुन सुभारको विषयलाई सरकारले बेवास्ता गर्दा स्वदेशी एवं विदेशी लगानीकर्ता नेपालमा लगानी गर्न आत्मविश्वास गुमाउँदै गएको निजी क्षेत्रको ठम्याइ छ ।

Dabur Nepal set to inject additional Rs 9.68 billion investment

The Investment Board Nepal (IBN) and Dabur Nepal signed a Memorandum of Understanding (MoU) today for reinvestment on projects for construction, operation and management of projects for capacity enhancement and diversification of goods on the private investment model.

IBN chief executive officer Sushil Bhatta and Dabur Nepal business head Harkirat Singh Bedi signed the agreement in the presence of the industry minister Ramesh Rijal, who is also a member of the investment board.

Earlier on February 8, the 49th meeting of the board approved the investment for the capacity enhancement and product diversification of Dabur Nepal. There will be an additional investment of Rs 9.68 billion according to the Capacity Enhancement and Diversification Project presented by Dabur Nepal. Dabur Nepal is planning to expand its capacity mainly in production of beverages including fruit juice.

On the occasion, Rijal said that foreign investors curious to invest in Nepal can make decisions by listening to those, who have been investing in the country. 

Dabur Nepal holds 97.5 per cent share of Dabur International Ltd, while the remaining 2.5 per cent share is held by Nepali investor Rukma Shumsher Rana.

The products of Dabur Nepal contributes some 5.34 per cent in total export earnings.

Finance Minister directs IBN to build large projects on its own

Ignorant of the role of the Investment Board Nepal (IBN), finance minister Janardan Sharma today instructed the board to move ahead with big projects by raising capital on its own. The board was established to ease the inflow of foreign direct investment (FDI) of over Rs 10 billion as a one-window solution.

Addressing the seventh meeting of the Monitoring and Facilitation Committee under the board today, the Finance Minister, who also happens to be the vice chair of the board, said that the Finance Ministry will extend necessary assistance to the board in building capital.

Unlike the nature of work of the board that is waiting for investors to come, it should focus on building capital and investing in big projects, the finance minister said, also claiming that the ministry will discuss how it can help to create such fund.

He also suggested the board to set up a capital fund for export-based projects after holding discussions with the private sector. Urging the board to initiate for investment by envisaging projects that would make a significant contribution to the gross domestic product (GDP) and capital formation, he said that the board should create projects itself.

The board, on the occasion, presented the progress report of Arun III Hydropower Project and its subordinate projects, logistics projects, Khaptad Integrated Tourism Development Programme, Tamor Reservoir Hydropower Project, Upper Marsyangdi Hydropower Project, Vehicle Manufacturing and Assembling Plant and Huaxin Cement Project.

Expressing his dissatisfaction over the non-implementation of the decision of the board to provide one-door approval to large foreign investors, the finance minister asked the board to provide one-door approval to facilitate foreign investment.

The board should facilitate foreign investors to come to Nepal by choosing the project themselves or as investment partners in the project, he said, adding that the traditional mindset of development has to be changed.

Government to have 5 per cent share in Rs 10 billion NRNA Investment Fund

 The government has promised to join hands with the Non-Resident Nepalis (NRNs) in setting up Rs 10 billion infrastructure fund.

In a meeting at the Finance Ministry today, the government announced its plan to invest five per cent in the fund according to its earlier agreement. On the occasion, finance minister Bishnu Prasad Poudel asked the NRNs to complete the registration process within a week. He also assured to provide necessary assistance, including additional financial support, so that the fund can be brought into operation immediately. 

The Non-Resident Nepali Association (NRNA) has been pushing the idea of setting up of a fund of Rs 10 billion to invest in the infrastructure sector. The Nepali diaspora has also started process of registering a separate company in Nepal for the purpose.

On the occasion, president of the NRNA Kumar Pant said that the process of registration of the company is underway. “The fund will start operating after the registration,” he said, adding said the NRNA will have 10 per cent share in the company and individual Nepalis living abroad will have 85 per cent. “The public offering will be floated for investment by NRNs.”

The NRNsA has started getting proposals for the investment sectors, Pant added.

The idea of investment fund was, though not the new one, the immediate past president (IPP) Bhawan Bhatta has pushed the process of registering the fund, and incumbent president Pant is completing the process.

The meeting was attended by minister for Industry, Commerce and Supplies Lekhraj Bhatt, finance secretary Shishir Kumar Dhungana, revenue secretary Ram Sharan Pudasaini, central bank governor Maha Prasad Adhikari, economic adviser to the finance minister Prakash Kumar Shrestha, chief executive officer (CEO) of the Investment Board-Nepal (IBN) Sushil Bhatt and others.

Developers submit DPR of four major projects to investment board

 The developers of four major infrastructure projects today submitted detailed feasibility study report (DFSR) and detailed project report (DPR) of their projects to Investment Board Nepal (IBN) today.

A developer Flash Freight Logistics and International Cargo Pvt Ltd has submitted the DFSR for the Private Freight Terminal and Bulk Handling Facilities Project to be constructed in Birgunj and Bhairahawa. A memorandum of understanding (MoU) was signed between the developer and the board on November 29 last year, according to the board.

Likewise, CG Logistics Pvt Ltd and Sharaf Group – the developers of the Multi-model Logistics Park Project to be constructed in Biratnagar – have also submitted its DFSR to the board. The MoU was signed between the board and the developers on June 17 last year.

Developer of the Damak Clean Industrial Park China-Nepal Industrial Park has also submitted the DPR for the project to board. The 39th meeting of the board held on July 2 last year had approved an investment of $586.1 million for the construction of the project, the board confirmed. “The project is being constructed in Damak of Jhapa with the joint investment of Lhasa Economic and Technology Development Zone Jing Ping Joint Creation Construction Project Development Corporation Co Ltd and Damak Clean Industrial Park.”

Likewise, Muktinath Darshan Pvt Ltd has submitted the DPR of 80.16-km-long Birethanti-Muktinath cable car to the board on November 29. The proposed cable car – from Birethanti along Ghodepani, Tatopani, Lete, Kowang, Tukuche, Marfa, Jomsom to Muktinath – has been

The chief executive officer (CEO) of the board Sushil Bhatta – receiving the DPRs and DFSR, said that these projects will soon enter next phase of development.

Meanwhile, the board has also held discussions with Nepal Electricity Authority (NEA) and officials of Hongsi Shivam Cement to solve the problems in the construction of the power transmission line required for the project.

During the discussion, acting managing director of NEA Hitendra Dev Shakya expressed his commitment to arrange power supply by constructing transmission line for project within May. 

Likewise, CEO of the board Bhatta said that the big projects like this can make a significant contribution to the overall economic development of the country, including employment generation. “The board is making all possible efforts for the necessary facilitation in the implementation of such projects,” he added.

IBN approves Rs 39 billion worth investments for hydel projects

 The Investment Board of Nepal (IBN) – chaired by Prime Minister KP Sharma Oli today – approved a total of Rs 38.68 billion worth of investments for three hydropower projects with a total capacity of around 200 megawatts (MW).

The 45th meeting of the board decided to approve investments worth Rs 38.68 billion for three hydropower projects that will be built on public private partnership (PPP) modality, according to a press note issued by the board.

The hydropower projects getting the approval from the Investment Board are 77.5 MW Ghunsakhola Hydropower Project (Rs 17.62 billion), 57 MW Himchuli Dordi Hydropower Project (Rs 10.62 billion) and 65 MW capacity Dudhkhola Hydropower Project (Rs 10.44 billion), the press note reads, adding that 

At the first meeting – after the government appointed Sushil Bhatta as its new chief executive officer in August – the Prime Minister also said that the board meeting could not be held regularly due to Covid-19. 

He also assured to continue the meeting regularly. The board – on the occasion – also welcomed newly appointed finance minister Bishnu Paudel as the board vice chair today.

CDC Group establishes presence in Nepal, invest more

CDC Group Plc – the UK’s impact investor for Africa and South Asia -- welcomes Rabi Rayamajhi as country representative for Nepal.
Rabi joins CDC from the Department for International Development (DfID) Nepal, where he was a private sector development advisor for four years and led projects in the financial and SME sectors. Prior to his role at DfID, Rabi used to provide advisory support to the Investment Board of Nepal (IBN) in promoting foreign investment and executing large-scale infrastructure projects in waste management, hydropower and cement sectors. He started his career at Standard Chartered Bank and has an MBA qualification from Singapore Management University.
According to a press note issued by the CDC, Rabi will be based at CDC’s representative office in Kathmandu, where he will work closely with CDC teams across Asia.
Over the last 18 months, CDC has made long term commitments to three businesses that will help economically support thousands of Nepalis through jobs, products and services. “We made a direct investment of a $15 million in NMB Bank, one of Nepal’s leading commercial banks,” the press note reads, adding that it was followed by a $12 million investment into a leading internet provider WorldLink, and a subsequent $21.9 million investment into the Upper Trishuli-1 Hydroelectric Project, which will supply clean and reliable electricity to millions of Nepalis.
In 2019 – along with a consortium of lenders – CDC signed a $453 million debt financing package to help build a hydro-electric plant in the Upper Trishuli region of central Nepal. Upper Trishuli is expected to help create over 20,000 jobs in the Nepali economy across multiple sectors. The hydro-electric plant will also increase Nepal’s electricity supply by one-third from today’s levels and provide clean, reliable power to millions of people.
For CDC, the Upper Trishuli commitment in 2019 swiftly followed a $15 million three-year loan to NMB Bank, one of the country’s leading commercial banks. In the same year we invested $12 million of equity in to the country’s largest private sector internet service provider, WorldLink.
Rabi will help accelerate our commitment to invest more capital in Nepal, and support local businesses to advance their commercial success as they work to adopt internationally recognised environmental, social and governance standards. He joins CDC at a time of uncertainty as the pandemic is challenging the lives of people, communities and businesses across Nepal, the press note further reads, adding that as a committed long-term provider of flexible capital to the private sector, CDC has never been more important. “With a mandate that includes providing counter-cyclical financing during financial crises, CDC is playing a role in protecting jobs and businesses.”
The firm’s response to the Covid-19 pandemic has three areas of focus: ‘preserve’, ‘strengthen’ and ‘rebuild’. CDC’s goal is to support the economic stability that will improve the lives of millions of people in Africa and South Asia, read more on its response framework here.
Head of Asia at CDC Srini Nagarajan welcomed Rabi to CDC as the Country Representative in Nepal. “His expertise in private sector development and extensive knowledge of the investment environment in Nepal will boost CDC’s priority of providing increased long-term capital support to businesses and bolstering sector growth in the country,” Nagarajan said, adding that Rabi will be instrumental in strengthening our partnership with businesses and broadening CDC presence in Nepal, as it works to enhance corporate governance, develop environmental and social strategies, promoting skills and job creation that power Nepal’s economy.
Likewise, the newly appointed country representative for Nepal Rabi Rayamajhi, said that he is proud to be representing CDC in Nepal and supporting the execution of the organisation’s mission to bring about lasting development impact and widespread economic growth in Nepal. “In only a short period of time, CDC’s commitment to Nepal’s finance and infrastructure sector has resulted in improved access and connectivity throughout the country,” he said, adding that he is keen to get to work on developing local partnerships that will continue to boost business growth and improve the lives of millions of people.
Welcoming a stronger presence for CDC in Nepal acting UK ambassador and country director for DfID, Nepal Lisa Honan said that the UK continues is committed to playing a strong role in working with the government of Nepal and all development stakeholders to ensure Nepal is ‘open for business’. “While the current Covid crisis has adversely affected Nepal’s economy, there are also opportunities for investments to help ensure Nepal’s recovery is resilient to future shocks and promotes green growth,” Honan added.

Investment board completes pre-qualification assessment of Rs 1.18 trillion worth projects

The Investment Board Nepal (IBN) claimed that it has completed the pre-qualification process of 14 projects worth Rs 1.18 trillion, out of the 50 projects that the investors showed interest during the Investment Summit 2019 held last March.
The board has already selected the company to conduct detailed feasibility study (DFS) of 756-megawatt (MW) Tamor Hydropower Project, IBN’s chief executive officer Maha Prasad Adhikari informed at a press meet orgainsed by the board today.
Likewise, the board has signed the initial investment agreement with Korean company Motrex to set up a vehicle manufacturing and assembly plant project worth Rs 10.54 billion, he said, adding that of the 77 projects that the government had showcased at the Nepal Investment Summit held in March, investors had submitted expression of interest (EoI) for 31 different projects amounting to more than $25.3 billion. “The board is continuously signing agreements with investors, who had expressed their interest in projects showcased at the investment summit.”
The board has also signed an agreement with a foreign firm to develop the Rs 64.6 billion worth Nepal-China Friendship Park Project in Province 1. “Similarly, the board has inked an agreement with two separate companies to conduct the DFS for developing the Rs 13 billion worth Multi-Model Logistic Parks in Biratnagar, Birgunj and Bhairahawa,” he said, adding that the board – as of today – is in the phase of implementing nine different projects worth Rs 565 billion. “Of this, development of Arun-III hydroelectric project is ongoing, while Hongshi Cement will soon start the second phase of production.”
These projects also include Kathmandu Outer Ring Road Project with a proposed cost of $1.87 billion, Lower Arun Hydro Power Project ($1.3 billion) and Nijgadh International Airport ($3.45 billion). Likewise, the applications for remaining 16 projects were not qualified during the evaluation process. “Similarly, the screening report has been prepared for Kathmandu Sky Train Project ($310 million) and Integrated National Agriculture Infrastructure ($70 million).”
Out of the total applications, the board disqualified 16 proposals and 20 did not receive any applications,” he said, adding that those projects which did not draw any eligible applicants will be still in the 'project list' of the board.
Adhikari, on the occasion, also sought government’s support in addressing few difficult legal processes that has been creating hassles in approving projects in a timely manner.

Arun-III to ink financial closure

The SJVN Arun-III Power Development Company is soon signing financial closure.
The company has almost finalised the necessary documents for the financial closure, residential representative of SJVN Arun-III Power Development Company Hareram Subedi said, adding that the company has already forwarded the necessary documents to Investment Board Nepal (IBN) for its final approval. “After it gives a green signal, the company will ink the financial closure with IBN by February,”
SJVN – a subsidiary company of Satluj Jal Vidyut Nigam Ltd of India, which has been tasked with building the project – has however, completed around 30 per cent of construction work of 900-megawatt (MW) Arun-III hydroelectric project.
 Investment Board Nepal is meanwhile discussing with the central bank before granting approval. “
Arun-III – an export-based project, which will bring the largest-ever government-to-government level foreign direct investment (FDI) from India worth $1.2 billion – has signed investment pledge with Everest Bank (Rs 10.5 billion) and Nabil Bank (Rs 5 billion).
The SJVN Arun-III Power Development Company said that they have accelerated the civil, hydromechanical and electromechanical works simultaneously. It has awarded civil works to an Indian firm called JP Construction, which has already started executing the construction work.
The board and SJVN had signed an agreement in November 2014 for the power development agreement of Arun-III hydropower project that is supposed to start generating energy by 2020 according to earlier agreement. But the board and SJVN reached an agreement later to complete the construction of the project by 2023.
Nepal will get Rs 330 billion as royalty in a period of 20 years and the project will also provide 21.9 per cent of the generated energy free of cost, apart from shares to locals and free energy to the affected areas. The project will generate 400 million units of power every year.

IBN approves Rs 85 billion investment for three hydro projects

The government today approved foreign investment worth almost Rs 85 billion for three hydropower projects.
The 42nd meeting of Investment Board Nepal (IBN) today – chaired by Prime Minister KP Sharma Oli – has approved foreign direct investment (FDI) for 216-megawatt (MW) Upper Trishuli 1, 50 MW Marshyangdi Besi and 37 MW Upper Trishuli-3B, confirmed IBN chief executive officer Maha Prasad Adhikari.
“While the IBN has approved Rs 65 billion investment for Upper Trishuli 1, Rs 11.77 billion has been approved for Marshyangdi Besi and Rs 8.22 billion for Upper Trishuli-3B,” he said, adding that the meeting has also extended the term of compensation dispute committee of the 900 MW Arun-III hydropower project that is looking into various issues and asked it to resolve them within two months.

Motrex to set up 4-wheeler assembling plant in Nepal

Following three rounds of negotiations, Investment Board of Nepal (IBN) has finally signed an initial agreement with Motrex Co Ltd for an investment worth $105 million – approximately Rs 11.95 billion at Wednesday's exchange rate – for setting up a plant in Nepal to assemble four-wheeler vehicles in the country.
The board and the South Korean company were holding negotiations for nearly nine months, after the board approved proposal in mid-March, according to the chief executive officer (CEO) of the board Maha Prasad Adhikari. “The board has finalised the project investment agreement with Motrex, subject to approval from their respective boards,” he said, adding that the agreement will pave the way for the South Korean company to set up the four-wheeler assembling plant in Nepal. “The company plans to manufacture four-wheelers in Nepal in the long-run.”
The South Korean company is mainly engaged in manufacturing and distribution of automotive parts. “Its products include audio-visual navigation (AVN), audio video (AV), around view monitor, head up display and rear seat entertainment (RSE),” according to the company.
Under the project, the company will import vehicle parts and assemble in Nepal. “The company has a target to assemble 1,000 four-wheelers in the first year of operation,” according to its proposal. “The environmental impact assessment and plant set up will take nearly three years.”
However, the Korean company was seeking infant industry protection for seven years to block any competitor for certain period of time. The auto dealers in Nepal are opposed to the condition of restricting entry of competitors.
“We have convinced Motrex that market competition was in their interest,” Adhikari said, adding that the company agreed to drop the condition. “The board has turned down the company's demand for entry restriction of competitors investing below Rs 10 billion.”
The board has way-out for most of other conditions too.
According to the board, the company has been seeking 10 per cent to 15 per cent waiver on the import and excise duties of equipment, machinery or any other parts needed for the assembling of four-wheelers in Nepal.
Though the board is positive towards providing waiver on the import of certain equipment, machinery or parts, the tax break has to be addressed through a separate act, according to the board. “The board has also urged the South Korean company to use at least 30 per cent of local materials in its assembled products, after a certain period of time.”

Nine international lenders to invest $453 million in Upper Trishuli-1

After a long homework of around decade, Nepal Water and Energy Development Company Private Ltd (NWEDC) today signed a foreign direct investment (FDI) agreement with a consortium of nine international lenders agreeing to inject $453 in debt financing for the construction of 216-MW Upper Trishuli-1 (UT-1) Hydropower Project.
Representatives from IFC, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), Export-Import Bank of Korea (K-EXIM), Korea Development Bank (KDB), CDC Group PLC (CDC), Netherlands Development Finance Company (FMO), PROPARCO Development Financial Institution, and the OPEC Fund for International Development (OFID) signed the financial agreement of $453.2 million – approximately Rs 51.30 billion – for the loan financing of Upper Trishuli-1 Hydropower Project.
Arranged by IFC, the loan agreements were signed to provide a total amount of $453.2 million for the project. “Loans amounting to $161.3 million from IFC, $60 million from ADB, $39.6 million from AIIB, $100 million from K-EXIM, $30.8 million from KDB, $21.9 million from CDC, $15.4 million from FMO, $11 million from PROPARCO, and $13.2 million from OFID have been provided for the project,” according to a press note issued by the Investment Board Nepal (IBN).
Speaking at the agreement signing ceremony, minister for Energy, Water Resources and Irrigation Barshaman Pun said that the project is a game changer as it serves as an example of how the private companies could help Nepal expand its hydropower sector and attract the much needed FDI.
Assuring of the support, assistance, and coordination needed to expedite the process to meet the timeline set by project development agreement (PDA) for the financial closure, he claimed that the project will be an example for foreign investors.
Located in Rasuwa district, the project will generate annual energy of 1,533 gigawatt per hour (GWh) from three power generating units of total installed capacity 216 MW. “Total 38.75 per cent of the annual capacity will be generated in dry season and the remaining 61.25 per cent will be generated in wet season,” according to the press note, which reads that the delivery point of such energy generated is the under-construction Trishuli-3B Hub substation in Nuwakot. The project site is located near the Kathmandu load center and can provide a firm power of 104 MW all round the year.
During the signing ceremony, Prime Minister KP Sharma Oli – in a video message – said that it is one of the largest FDI projects of the country. “The project is important as additional 9 million people will benefit as the project comes into operation,” he said, adding that it will also prove crucial to support the government’s plan to end poverty and foster the economy. “The government urges foreigners to invest in such mega projects wholeheartedly.”
The project includes 29.5-metre high dam in Trishuli River, 9.7 kilometer-long headrace tunnel, 292- metre high vertical pressure tunnel and an underground powerhouse.
Addressing the signing ceremony, finance minister Dr Yuba Raj Khatiwada said that the project is a pilot project for bigger projects. “We are working on creating investment friendly regulations and have been very clear about the PPA policy including PPA in US dollar terms,” he said, adding that land and forest acquisitions have been made very simple to attract the investment.
Upper Trishuli-1 is the first project in South Asia to successfully complete the process of Free Prior Informed Consent (FPIC) from the local people in the project area.
The construction of the project will be done based on a fully wrapped engineering, procurement and construction (EPC) contract. A joint venture of Korean firms — Daelim Industrial Co and Kyeryong Construction Industrial Co — will carry out main construction works of the project that is scheduled to be completed is 5 years.
According to NWEDC, the construction of the project will start after the approval of the
Financing Agreements by the central bank and after the fulfillment of other conditions in the signed Financing Agreement documents. Earlier, the company had seen a funding oversubscription with nine multinational lenders offering a loan of $631 million against the $453 million required in debt finance.
“There is no question that Nepal has the potential to be an energy powerhouse,” chief executive officer of NWEDC Bo-seuk Yi, said, on the occasion. “To realise that promise, Nepal can enlist the help of private companies, which have the capital and expertise to make major projects a reality,” he added.
Likewise, director of infrastructure finance, South Asia, Central Asia, and West Asia at ADB’s Private Sector Operations Department Shantanu Chakraborty said that the agreement is a landmark transaction that will provide strong incentives for further private sector investment in Nepal’s energy sector.
To ensure it provides sustainable benefits, Chakraborty said that this project will adopt international best practices in safeguards management and will also introduce measures to promote gender equality, including job opportunities for women and better access to education, health care, amenities, and infrastructure.
On the occasion, IFC director for South Asia Mengistu Alemayehu said that the project represents a significant milestone in the development of Nepal’s hydropower potential as it has been able to attract meaningful private sector participation, particularly from international investors.
In July, the cabinet decided to extend the tax holiday to the company a few weeks after the anti-dollar alliance – Asian Infrastructure Investment Bank (AIIB) – approved its first $90 million loan to the project, raising eyebrows over the government’s decision to give tax holiday for the company, which has a dollar PPA with the power utility.
The project development agreement of the project was signed on December 29, 2016 while the power purchase agreement between NWEDC and Nepal Electricity Authority (NEA) was signed in January 2018.
When the NEA signed a power purchase agreement with Nepal Water and Energy Development Company a year ago to purchase the electricity generated by the project, the state-owned power utility agreed to pay in US dollars for a period of 10 years or until the portion of the investment made with foreign loans is recovered by the developer, whichever comes first.
After the row over hedge fund, the developer agreed to provide 17 per cent of the energy to the power utility free after 14 years and the government and electricity authority agreed to contribute two-thirds of the amount to the hedge fund.
According to the provisions, the company will be exempted from 100 per cent of income tax for the first 10 years of commercial operation and 50 per cent exemption for an additional five years.

HIDCL, Power China to build 762-MW Tamor hydropower project

The government has awarded the 762-megawatt (MW) Tamor hydropower project to a joint venture between a Nepali and Chinese firm.
Hydroelectricity Investment and Development Company Ltd (HIDCL) of Nepal and state-owned Power China Corporation (PCC) will construct the reservoir project on government-to-government (G2G) basis, according to a press note issued by the Ministry of Energy, Water Resources and Irrigation (MoEWRI).
Construction of the Tamor project – that will cover Panchthar, Taplejung, Terhathum and Sankhuwasabha districts – is expected to start from next fiscal and be completed by 2025, it reads, adding that the Investment Board Nepal (IBN) and Ministry of Energy, Water Resources and Irrigation (MoEWRI) – during Chinese President Xi Jinping’s two-day state visit to Nepal – awarded the contract to HIDCL-Power China to build the project under the public-private-partnership (PPP) model.
After receiving the letter from the board, Power China signed a memorandum of understanding (MoU) on project implementation agreement with HIDCL. The chief executive officer of HIDCL Chhabi Raj Pokharel and vice chairman of Power China Pan Deng Yu today signed the MoU on behalf of their respective organisations.
According to minister for Energy, Water Resources and Irrigation Barsha Man Pun, the government has also signed an agreement with Power China to build the 156-MW Madi multipurpose hydropower project – located in Rolpa district – that is estimated to cost around $39 million, according to an initial study.
The HIDCL and Power China had jointly submitted a project development proposal at the investment board to build both the projects with a share structure of 46:54 per cent, with the Nepali firm investing 46 per cent and Power China investing 54 per cent of the project cost, for the Tamor hydel project. “Likewise, in Madi multipurpose hydropower project, HIDCL will manage 26 per cent and Power China will manage 74 per cent of the total investment.”
On August 1, the board meeting chaired by Prime Minister KP Sharma Oli had shortlisted three companies including Power China, Nebras Power Holding of Qatar and Fuji Electric Company Ltd of Japan and sought proposals from them. However, only HIDCL-Power China submitted a proposal – jointly with Nepali firm – to develop the Tamor reservoir project till the final date on September 15.
Earlier, the board had formed a committee – led by minister Pun – to conduct necessary assessment of the proposal. After studying details of the project, the HIDCL-Power China’s proposal was forwarded to the board, which is finalised today.
The government will acquire necessary land and provide it to the developer, according to the board. “The government will also provide project security,” it informed, adding that the board will also facilitate in legal approvals, permits, review and monitoring of the project. “But, the developer will plan, design, build, finance and operate the facilities during the concession period of 30 years.”
Likewise, the project developer will also be responsible for collecting revenue from the project during the concession period. After the concession period is over, the developer will have to hand over the project to the government.
According to an earlier study, the construction cost of the Tamor hydel project has been estimated at $1.21 billion, including interest during construction, finance cost and the 75-km-long 400 kVA double-circuit transmission line from the project site to Inaruwa in Sunsari district.
According to the Nepal Electricity Authority (NEA) study, if the project builds a dam that is 205 metres high then it will generate 762-MW of electricity. But, if the height of the dam is increased to 300 metres the project can generate 2,565-MW of electricity.
The government had also showcased Tamor at the second Investment Summit held on March 29 and 30.

IBN, Chinese company seal deal for Damak Industrial Park

The government and Damak Clean Industrial Park Pvt Ltd (DCIPPL) signed a memorandum of understanding (MoU) for the construction of the 'China-Nepal Friendship Industrial Park' in Province 1.
The chief executive of Investment Board Nepal (IBN) Maha Prasad Adhikari and the chairman of DCIPPL, Govinda Bahadur Thapa signed the MoU amid a ceremony held in the capital today.
The industrial park – located at Damak in Jhapa district – is going to be built with a total investment of around Rs 64 billion from Chinese investor Lhasa Economic and Technology Development Zone Jing-Ping Joint Creation Construction Project Development Co Ltd.
Spread over an area of 1,600 hectares, the industrial park will be built in public-private partnership (PPP) model, according to the IBN. “The government has already completed the process of land acquisition to construct the park. The construction will start as soon as the Detailed Project Report (DPR) for construction, operation and management of the industrial park is presented followed by the Project Development Agreement (PDA), the board informed, adding that the park will be spread over Gauradaha municipality, Kamal rural municipality and Damak municipality of Jhapa. “The project is the first one in Nepal supported under the Belt and Road Initiative (BRI) of China.”
The project is expected to add a new dimension in sectors like expansion of investment between Nepal and China and infrastructure development. The project is also expected to contribute to the expansion of physical infrastructure, fulfill local demand, and support export promotion, according to vice mayor of Lhasa Municipal People's Government Liu Guang Min.
Speaking on the occasion of MoU signing, Liu said that the industrial park will contribute toward employment generation and socio-economic development of Nepal.
Likewise, chairman of the industrial park Govinda Thapa said that the construction work of the project will present a model of efficiency and transparency. “The project will establish a new model of development in Nepal,” he said, adding that the project will give us a model that the entire country and the people can be proud of.
Likewise, Adhikari, on the occasion, said that the construction of the industrial park will contribute to the development of Nepal. Chairman of the Industrial Area Development Limited Nanda Kishor Basnet said that the project will be Nepal's model project. “Nepal did not have projects other than hydropower projects in PPP model,” he said adding that that it would be Nepal's first non-hydro project under PPP model.
The signing of the MoU precedes the visit of Chinese president Xi Jinping that is scheduled for next week.
Though the government has approved Chinese investment of Rs 64 billion to construct Nepal-China Friendship Industrial Park, the construction work is still unsure as the landlords are not in consensus about the use of their lands.
Some of the landlords have not accepted the compensation amount stating that the amount is too low.
According to Industrial Area Development Limited, some 117 landlords have received Rs 120.7 million till now. The compensation has been distributed according to the recommendation from a committee formed under the coordination of the Chief District Officer (CDO).
The District Administration Office has classified the land into three category: cultivable land, riverside land and land occupied by bushes. Compensation of Rs 2.2 million has been approved for a bigha of cultivable land, Rs 800,000 for land occupied by bushes, and Rs 200,000 for riverside land. The government has provided Rs 430.44 million for compensation distribution.
The government has distributed the compensation to the landlords of Damak Municipality, Gauradaha Municipality, and Kamal Rural Municipality. However, landlords of 61 units of land have not been identified.
Basnet said that the construction work will begin by mid-December in 500 bigha land of Jharka in Kamal-7. However, the landlords of Kamal-7 have suspected the government's intention and blaming that it is a ploy to capture their land. “No paper has mentioned that the land is taken for the establishment of the Industrial Park, they blamed, adding that it might be a strategy of the government to buy the land for cheap. The landlords have also claimed that the recommended compensation amount is less the government valuation of their land. “A compensation of Rs 200,000 per bigha is recommended,” they said, adding, “However, government rate is Rs 700,000 per bigha.
Basnet, however, claimed that the compensation amount has been decided according to the Land Acquisition Act.

Government shortlists developer for Nijgadh airport project

The government today shortlisted developers for the construction of three mega projects including Nijgadh International Airport, Lower Arun Hydropower Project and Kathmandu Outer Ring Road Project.
A meeting of the Investment Board Nepal (IBN) chaied by Prime Minister KP Sharma Oli today shortlisted the Swiss company Zurich Airport International AG to develop Nijgadh International Airport Project and decided to seek extensive proposal from it to construct the second international airport in Bara, according to a press note issued by the board.
“Though some seven firms submitted their proposals for for the construction of second international airport, only Zurich Airport International AG is qualified for the project as its LoI matched the eligibility criteria set by the board,” chief executive officer of the board Maha Prasad Adhikari confirmed. “The remaining six companies failed to meet the criteria.”
The other firms including Matrix Enterprises of Nepal, China Airport Construction Group and China State Construction Engineering Company from China, GMR of India, Qatar Airways and Vinci Group of France were disqualified due to lack of eligibility criteria.
Construction modality of the airport project had remained a major conflict between the government, political parties and the private sector. While calling for EoI for the development of the project, the government had sought proposals from interested firms to build the airport project either under the build, own, operate and transfer (BOOT) or public private partnership (PPP) modality.
The estimated cost of the airport project stands at Rs 400 billion ($3.45 billion), according to the board. “The airport will be built in three phases; the first phase will cost $1.21 billion, the second phase $1.12 billion, and the third phase $1.12 billion.
The government had decided to develop Nijgadh International Airport, one of the most ambitious projects, in 1995. But the timeline for the new airport was pushed back on multiple occasions due to financing and legal issues over its environmental impact. The Environmental Impact Assessment (EIA) report approved by the government shows that more than 2.4 million small and large trees will have to be cut down to build the long-awaited modern international airport in Nijgadh that will have a 4,000-metre runway.
The meeting also went through the proposal to construct Lower Arun Hydroelectric Project. According to the board, three firms – SJVN Ltd of India, a joint venture between Nepal’s HIDCL and Power Construction Corporation of China Ltd, and a joint venture between Nepal’s Green Resources Pvt Ltd and Electric Power Development Company (J Power) of Japan – submitted proposal to develop 679-megawatt Lower Arun Hydropower Project that is estimated to cost Rs 670 billion. “All the three proposals on Lower Arun meet the board’s eligibility criteria so ‘the board is preparing to ask them for detailed proposals,” Adhikari said, adding that the board will evaluate their proposals and pick a firm for the development of the public-private partnership project.
The Lower Arun Hydropower Project has been in limbo since 2016, when the government revoked the licence of a Brazilian company, Brass Power. The government had issued the licence to the Brazilian company in 2012. The Brazilian company had even planned to export more than 50 per cent of the energy generated to India but Brass Power did not show interest in developing the project after there was no progress in the power purchase agreement (PPA) with India.
After revoking the licence, the government had kept the project in its basket and was looking for a builder.
Likewise, the board has also received four proposals for the construction of the Kathmandu Outer Ring Road Project, but three proposals did not meet the eligibility criteria. “A Chinese construction company, China Communication Construction Co, has been shortlisted for the development of the Kathmandu Outer Ring Road Project,” the board informed, adding that the 72-kilometer Outer Ring Road will be constructed at a cost of Rs 212.3 billion. “If the detailed proposal, which has yet to be received from the shortlisted Chinese firm, is found satisfactory, then the project will be awarded.”
As per the initial study report in 2008, the cost of construction of the project was expected to hover around Rs 70 billion.
However, since the price of land has skyrocketed in the intervening years, the project construction cost is expected to shoot up. The project was initially proposed 14 years ago in the budget for the fiscal year 2005-06. The initial cost estimate for the project stood at Rs 6 billion.
The much talked Outer Ring Road will be 50 meters wide with eight lanes, cycle tracks, green belts and pavements on both sides along with flyovers at major intersections, according to the board.
“The companies that have been shortlisted for all these projects will submit their detailed proposals and the board will evaluate them,” Adhikari said adding that the contracts will be awarded to those that fulfill all the requirements.
According to the World Bank, Nepal needs to spend 10 per cent to 15 per cent of the gross domestic product (GDP) annually on infrastructure for the next 10 years. To boost investments, the government earlier this year in March had organised Nepal Investment Summit 2019, which saw investment proposals worth about $17.5 billion from both domestic and foreign investors. All the three projects were showcased during the Investment Summit 2019 in March.

HIDCL, Power China to construct 762-MW Tamor reservoir project

The Hydroelectricity Investment and Development Company Ltd (HIDCL) and state-owned Power China Corporation have jointly submitted a project development proposal at the Investment Board Nepal (IBN) to construct the 762-megawatt (MW) Tamor reservoir project.
The construction cost of the project has been estimated at $1.21 billion, including interest during construction, finance cost and the 75-km-long 400 kVA double-circuit transmission line to Inaruwa, according to initial study.
Prime Minister KP Sharma Oli-led meeting of the board had shortlisted three companies – Power China, Nebras Power Holding, Qatar and Fuji Electric Company Ltd, Japan – and sought proposals from them on August 1. However, till the deadline of September 15 – yesterday – to submit the power development proposal, only HIDCL-Power China has jointly submitted a proposal. As only one company has submitted its proposal, it is highly likely to be awarded the development licence, IBN chief executive Maha Prasad Adhikari said, adding that that the board had given the three shortlisted companies until September 15 to submit their proposals but only one has submitted the project development proposal.
“The government has, however, formed a committee led by minister for Energy, Water Resource and Irrigation, Barsha Man Pun, to conduct necessary assessment of the proposal and submit it to the IBN,” Adhikari said, adding that the committee will study the HIDCL-Power China proposal and forward it to the board to finalise the further process.
According to the board, the government will acquire necessary land and provide it to the developer. “The government will also provide project security,” he said, adding that it will also facilitate in legal approvals, permits, review and monitoring of the project.
Likewise, the developer will plan, design, build, finance and operate the facilities during the concession period. “The project developer will also be responsible for collecting revenue from the project during the concession period,” Adhikari added.
After the concession period is over, the developer will have to hand over the project to the government as others will also do.
The government had showcased the project at the second Investment Summit held on March 29 and 30 in Kathmandu. However, the IBN meeting has yet to formally award the project licence to HIDCL-Power China. During the summit, five companies from China, India, Japan and Qatar had expressed their interest to build the project under PPP model. The project – that lies in Panchthar, Taplejung, Terhathum and Sankhuwasabha districts – will be developed under Public-Private-Partnership (PPP) model.

Nepal needs to increase investments in energy by fourfold: World Bank

In line with the ambitious target of producing 15 gigawatts (GW) in 10 years and meeting the rising domestic demand for electricity, Nepal needs to increase investments in the energy sector by two- to fourfold, according to a World Bank report.
“A twofold to fourfold increase in public and private investment is needed to meet the projected demand in the country and utilise the sector’s export potential,” the report reads, adding that electricity sector investments will need to accelerate substantially to an average of $1.3 billion to $2.1 billion annually between 2018 and 2040.
The report, which suggests policy-level reforms to strengthen the institutional capacity of power sector institutions with the view of attracting large-scale investment in the energy sector, has come at a time when Nepal’s foreign direct investment (FDI) level has fallen by 25.4 per cent year-on-year.
According to the central bank, the amount of direct investment in Nepal declined to Rs 13.06 billion in the fiscal year 2018-19 from Rs 17.52 billion in a fiscal year ago 2017-18.
The Nepal Electricity Authority (NEA) estimates that the country will have a surplus of around 8,000 megawatts (MW) by 2025 as its generation capacity is expected to reach 10,924 MW, while peak demand is likely to reach 2,981 MW.
Infrastructure experts say the generation and export targets will not be achieved unless the government focuses on implementing policies to facilitate investments in the sector at the earliest. “The problem is not with the laws, policies and work procedures governing foreign or private investment in the sector, the problem is with the hassle-laden processes that have dissuaded potential investors,” said a former secretary at the Ministry of Energy, Water Resources and Irrigation Anup Kumar Upadhyay.
According to Upadhyay, Nepal should facilitate domestic and foreign investment in export-oriented projects by stringently monitoring systemic delays by authorities and eliminating social and financial hurdles faced by investors such as local obstructions, risk hedging and profit repatriation.
“It will be important to create an enabling environment for foreign investment and financing to flow into the sector in a sustainable way while managing fiscal commitments and contingent liabilities risk,” reads the report issued by the multilateral institution, which has financed the construction of high capacity transmission lines and hydel schemes.
According to the World Bank, Nepal needs infrastructure investments of around 10 to 15 per cent of the gross domestic product (GDP) annually for the next 10 years, and the success of these investments will depend on the timely implementation of investment-related legislation that meets good practices.
The report has come at a time when the Finance and Energy ministries are divided over contributions from the ministries and the state-owned power utility to the hedge fund, a financial instrument used as a cushion against currency fluctuations faced by investors who bring investments both in debt and equity in foreign denominations.
Negotiations between the Energy Ministry and a consortium of Chinese and Nepali developers of the 600 megawatt (MW) Upper Marshyangdi project including Butwal Power Company (BPC) have stalled after the ministries locked horns over the terms of the hedging mechanism.
Earlier, the Korean developers of the 216-MW Upper Trishuli 1 Hydroelectric Scheme had also faced bureaucratic impediments owing to hedge fund contributions, which were sorted out following months-long discussions.
According to independent power producers (IPPs), there is a funding gap in energy projects, and foreign investors have expressed interest in channelling investments in the sector but the country lacks a proper risk-sharing mechanism between investors and the government. “Judging by the foreign direct investment (FDI) commitments, we can say investors are interested but the government’s inability to share business risk and assure investors a high level of socio-economic support has deterred the possibilities,” according to vice-president of the Independent Power Producers’ Association of Nepal (IPPAN) Kumar Pandey.
Investment Board Nepal (IBN) data revealed that Nepal received investment pledges of  Rs 36 billion from China and Rs 10 billion from India in 2018. But a large portion of those pledges is yet to materialise in the form of direct investment.
The report has urged stakeholders to strengthen the enabling conditions for electricity trade with its neighbours by establishing the appropriate legal, regulatory and institutional environment for energy export.
The report coincides with the attempts of policy makers to end the deadlock in negotiations over financing and implementation modalities of the second cross-border transmission line between Nepal and India, and urge their Indian counterparts to establish government policies related to energy banking in India which will allow its power sector regulator to formalise energy exchange between the two countries, which is currently done through mutual agreement.

Finance Minister invites businesspeople to invest in Nepal

Finance Minister Dr Yubaraj Khatiwada has invited businesspeople to invest in Nepal as the country has created business friendly environment. Giving examples that all the foreign firms operating in Nepal have been making up to 25 per cent return on equity (RoE) against the global average of 10 per cent, he said that Nepal is a better option for investors.
Speaking at a session during the Nepal Infrastructure Summit 2019, the finance minister also informed that Nepal is in the process of conducting sovereign credit rating to facilitate businesses in the country. However, he acknowledged that the government has not been able to give due priority to the infrastructure sector due to lack of enough resources as the incumbent government also has bigger responsibility of ensuring social security of citizens.
“The Constitution has guaranteed more than 30 fundamental rights to the people and majority of them are related to social security,” he said, adding that the government also has to ensure availability of resources – administrative – to all 761 governments across the country. “The government is, therefore, promoting the support and investment from the private sector for desired economic goals and development aspirations of the country.”
Ample investment in the infrastructure, including roadways, railways, airways and the tourism infrastructure, will ensure easy entry of the private sector in the development process, he added. “Along with this, the government is seeking private sector’s support also to diversify and minimise risks.”
According to Khatiwada, a few infrastructure projects could also be operated in business model to attract private sector’s investment.
Likewise, former chief executive officer of Investment Board Nepal (IBN) Radesh Panta said that the country today needs quality investment for which the government should ensure necessary subsidy packages and coordination with investors.
World Bank vice president Jingdong Huo, on the occasion, said that the multilateral development partner has been contributing the private sector-oriented economic development in Nepal. According to Huo, the World Bank has been operating 25 projects in Nepal at present, while $2.6 billion worth of new projects have been initiated in Nepal recently. “The majority of economic indicators of Nepal today are satisfactory,” he added.
Likewise, chief executive officer of NMB Bank Sunil KC informed that banks have been investing almost 20 per cent of their loan portfolio in the infrastructure sector. “Of the total, majority of the investment is in hydropower and renewable energy,” KC added.
Though Nepal needs huge investment to achieve targeted economic growth rate, he lamented that the financial sector is often witnessing the crunch of loanable funds. “In such a context,” he urged the government to facilitate banks to bring in funds from offshore markets.
On the occasion, president of Institute of Chartered Accountants of Nepal (ICAN), Krishna Acharya said that ‘accountability’ is the primary challenge facing the country at present. He also highlighted the necessity of effective coordination between the government, private sector and the financial sector for development of infrastructure in Nepal.

Investment board approves Rs 64 billion industrial park

The 39th board meeting of the Investment Board Nepal today approved Rs 64 billion in foreign investment for the development of China-Nepal Friendship Industrial Park in Damak of Jhapa.
Damak Clean Industrial Park will prepare the detailed project report (DPR) of the industrial park, according to a press note issued by the board, which has also claimed that the multi-million-dollar project will be financed by Lhasa Economic and Technology Development Zone Jing-Ping Joint Creation Construction Project Development.
Likewise, the board meeting chaired by Prime Minister KP Sharma Oli also decided to ask a sealed proposal from two companies for the development of 756 MW storage-type Tamor Hydropower Project, which is located in Panchthar and Tehrathum districts. The project is expected to cost $1.2 billion based on the feasibility study conducted by the Nepal Electricity Authority (NEA) in 2016.
The board also informed that a joint venture of Hydroelectricity Investment and Development Company and Power Construction Corporation of China and another joint venture of Nebras Power Qatar Holding LLC and Fuji Electric Company, Japan had expressed interest in the project development during Nepal Investment Summit held in March.
The board also approved CG Logistics proposal to prepare the Multi Model Logistic Park in Biratnagar, the press note reads, adding that Green infrastructure has been approved to study of the proposed Railway Linked Private Freight Terminal in Janakpur.