MCA-Nepal marks the start of upgradation of 40km Dhan Khola to Lamahi section of East-West Highway

Millennium Challenge Account Nepal (MCA-Nepal) today marked the commencement of the upgrading of the 40km Dhan Khola-Lamahi section of the East-West Highway. The road upgrading and maintenance works will, for the first time in Nepal, apply Full Depth Reclamation and Superpave as modern construction methods that offer important gains in quality, durability, and sustainability, according to MCA-Nepal.
By creating a stronger and longer-lasting road surface, reusing existing asphalt materials, and reducing environmental impacts, these approaches will help deliver a more reliable and cost-effective investment over the long term, a press note issued by the MCA-Nepal reads. "The project will also widen the road to 12 meters, with a 7-meter carriageway and 2.5-meter shoulders on both sides."
Addressing the event, the Chief Minister of Lumbini Province Chet Narayan Acharya, welcomed the use of modern technologies like FDR and Superpave, which will ensure better quality and longer-lasting roads. “This is a major step forward for our province and the people who rely on this highway every day," he said, adding that the upgrading of the road section will not only make travel safer and more reliable, but also open up new opportunities for local businesspeople, farmers, and entrepreneurs.
Similarly, Charge d'Affaires ai at the US Embassy Scott Urbon said, “Today’s launch of the Dhan Khola-Lamahi road upgrade marks an important milestone in the partnership between the United States and Nepal."
Through the MCC Nepal Compact, we are investing in high-quality, durable infrastructure that will lower transportation costs, improve safety, and connect communities to markets and opportunities, he said, further adding, “This project reflects our trust in Nepal’s future and our joint dedication to sustainable economic growth.”
Speaking at the event, Joint Secretary at the Ministry of Physical Infrastructure and Transportation and MCA-Nepal Board Member Sushil Babu Dhakal expressed, “As a Board member, I am pleased to highlight that MCA-Nepal’s investments are designed to complement the Government of Nepal’s plans and programs."
This collaboration reflects our shared commitment to building resilient infrastructure and expanding economic opportunities for our communities, he said, appreciating the efforts of all involved and look forward to the timely completion of this important project.
The MCC Deputy Resident Country Director Sanjay Poudyal, on the occasion, remarked that this milestone reflects MCC’s commitment to supporting Nepal in building resilient, cost-effective infrastructure using advanced technologies that ensure long-term performance.
"The commencement of works on the Dhan Khola-Lamahi section marks a significant step in implementing the Road Maintenance Project under the MCC Nepal Compact," said MCA-Nepal Executive Director Khadga Bahadur Bisht said. "MCA-Nepal remains committed to delivering this project efficiently, transparently, and to the highest quality standards," he said, adding, “I would also like to recognise the continued support from the Government, Millennium Challenge Corporation (MCC) and our key stakeholders, the Ministry of Physical Infrastructure and Transport, the Department of Roads, and the MCA-Nepal Board.”
The Road Maintenance Project is a key component of the MCC Nepal Compact, aimed at lowering transportation costs and improving road conditions across Nepal.

World Bank approves $150 million to improve resilience of bridge network, connectivity and access to services

The World Bank’s Board of Executive Directors today approved a financing package of $150 million for Nepal’s Third Bridges Improvement and Maintenance Programme (BIMP-III) to strengthen the resilience of bridges in the Strategic Road Network, ensuring safer and uninterrupted connectivity across the country’s diverse and challenging terrain.

Nepal's bridge system serves as critical lifelines connecting remote and urban communities to essential services, including healthcare, education, and economic opportunities. Vulnerabilities caused by frequent climate-induced disasters such as floods, landslides, and earthquakes severely affect the bridge infrastructure.

The programme, led by Department of Roads, will focus on climate-resilient measures such as enhanced structural designs and innovative technologies, including real-time monitoring systems to safeguard bridges against extreme weather events. The programme will also support bridge designs prioritising accessibility for all users, connecting marginalized communities to vital services.

“The resilience of Nepal’s bridge network is fundamental for safe and sustained connectivity,” said Division Country Director for Maldives, Nepal, and Sri Lanka David Sislen. “This programme emphasizes resilient infrastructure development and promoting access to markets and services for vulnerable communities while promoting Nepal’s sustainable growth.”

The programme includes capacity-building initiatives for the Department of Roads, promoting innovative solutions and strengthening institutional systems for effective infrastructure management.

Government and World Bank launch $128 million project to improve provincial and local road network

The Government of Nepal and the World Bank jointly launched the $128 million (equivalent to Rs 17.15 billion) Provincial and Local Roads Improvement Programme-Phase 1, today. 

The project aims to enhance the connectivity, efficiency, resilience, and safety of Nepal’s provincial and local road network while also strengthening the government's ability to manage the road network, according to a press note issued by the World Bank. "The programme will be implemented by the Ministry of Urban Development in coordination with the provincial and local levels." 

The project was launched by Deputy Prime Minister and Minister for Urban Development Prakash Man Singh in the presence of provincial ministers of physical infrastructure and development from Sudurpashchim, Karnali, and Madhesh provinces.

“This project promotes the spirit of federalism embodied in the constitution bringing together the three tiers of government to work for the benefit of Nepalis," Shrestha said, adding that the focus of the project on environment-friendly and climate-resilient construction techniques and five-year maintenance component is key to supporting sustainable infrastructure development. 

The first phase of the project will upgrade and improve 180km of selected provincial roads and bridges, undertake maintenance of 400km and 700km of existing provincial roads and bridges respectively, and construct 100km of all-weather roads and bridges to provide connectivity to prioritized municipalities and local levels.

"This project will help improve Nepal's road infrastructure with a focus on resilience, and safety," said  World Bank Regional Country Director for Maldives, Nepal, and Sri Lanka David Sislen. “By working closely with the Government of Nepal, we are committed to ensuring better access to essential services and economic opportunities for millions of Nepalis.”

The first of the three-phase project will be implemented in Sudurpashchim, Karnali, and Madhesh provinces and 13 municipalities which will be scaled up in future phases. About one million people are expected to benefit from improved access to all-weather, resilient, and safe provincial and local roads and bridges.

At the launch event, a tri-partite memorandum of understanding was signed between the federal, provincial, and local governments of Sudurpashchim, Karnali, and Madhesh provinces for the implementation of the project.

The project will incorporate several best practices, such as five-year performance-based maintenance combined with construction contracts, routine maintenance conducted by self-help groups, complementary community-led infrastructure projects, pilot testing alternative connectivity methods and rural transport services, development of approach roads, and implementation of an online programme monitoring and management system.

Nepal-India relationships rest on four pillars: Visiting Indian foreign secretary

 India’s relationship with Nepal rests on four pillars – development cooperation, stronger connectivity, expanded infrastructure and economic projects – according to visiting Indian foreign secretary Harsh Vardhan Shringla.

Shringla, who is on a two-day official visit to Nepal, during a lecture on Nepal-India relations in Kathmandu today, also said stressing the need for strong cooperative relations between the two neighboring countries, he also said that his country sees Nepal as foremost friend and development partner. “India will work to Nepal's priority.”

He also highlighted easier and enhanced access to educational opportunities in India for the young people of Nepal. “India will work to Nepal’s priorities,” he said, adding that the structure that the pillars hold up is also well-defined and unchanging – mutually beneficial people-to-people contacts. And in all this technology, particularly digital technology, is to my mind a force multiplier. “Nepal is fundamental to India’s neighborhood-first policy apart from people-to-people linkages between the two countries are strong.”

“Enhancing cross-border connectivity and infrastructure projects are also critical,” he said, adding that they unlock potential of millions and in millions. “Connectivity projects come in various forms like physical connectivity projects such as highways, rail and air links and inland waterways enhance movement of goods and people, whereas energy connectivity – whether power transmission lines or petroleum pipelines – contribute to the well-being of each other’s citizens, and build mutual trust and partnerships.”

“Digital connectivity through optical fibre networks is our route to the future, particularly, and as we find in India, with remote access to education, healthcare and other services through the digital medium,” he said. “Finally, trade facilitation through upgraded border infrastructure makes for easier transit and seamless commerce.”

“India sees itself as Nepal’s natural and instinctive responder,” the Indian foreign secretary said, while referring to India's prompt response to devastating earthquake in Nepal in 2015 that claimed nearly 10,000 lives leaving thousands injured. “India will also share the Nobel coronavirus vaccines as soon as the vaccine once it is rolled out.”

Shringla arrived Kathmandu yesterday at the invitation of his counterpart Bharat Raj Paudyal. Earlier yesterday, he called on President Devi Bhandari, Prime Minister KP Sharma Oli and foreign minister Pradeep Kumar Gyawali. Shringla also held a delegation-level meeting with foreign secretary Paudyal yesterday afternoon. “In my meetings here in Kathmandu, with the President and the Prime Minister of Nepal, the foreign minister, and my counterpart the foreign secretary, and other dignitaries and officials, I have been left with no doubt that our countries are on the same page and share the same vision,” he informed

He also reminded the high level meetings of the leaders from both the countries. “Our Prime Minister’s visit to Nepal in August 2014 was the first at that level in 17 years,” he said, adding that the visit injected a fresh energy into the relationship and created a steady stream of two-way travel and developmental initiatives. “Over the past six years, Prime Minister Modi has visited Nepal four times and the Prime Minister of Nepal has been welcomed in India seven times, apart from the leaders have met 16 times at the level of head of state or head of government.”

He also reminded the High Impact Community Development Projects, which according to him are tailored to the needs of the local community, create community assets, and promote socio-economic welfare at the grassroots level. “Such development projects have been implemented in all 77 of Nepal’s districts and over a hundred of them have been completed since 2014 when our Prime Minister visited Nepal for the first time when he took over.”

These programmes cover diverse sectors such as education, health, irrigation, drinking water, preservation of culture, skill development, youth training, and agriculture, and have immediate and positive impact on the lives of people, touching everybody in society, added the visiting guest. 

Before wrapping his two-day visit, Shringla today afternoon travelled to Gorkha and inaugurated three schools – Shree Mahalaxmi, Shree Ratnalaxmi and Shree Tara Secondary Schools – constructed with Indian reconstruction assistance. “There are about 1600 students in these three schools, who now have the advantage of the newly constructed earthquake resilient school buildings,” according to a press note from the Indian Embassy. “These schools are part of 71 educational institutes across nine districts being built under government of India grant assistance of $50 million for reconstruction in the education sector,” it reads, adding that the nine beneficiary districts are Gorkha, Nuwakot, Sindhupalchowk, Ramechhap, Dolakha, Kavrepalanchowk, Dhading and Kathmandu. 

Speaking on the occasion, Indian foreign secretary emphasised that education is the best investment in the future of the country and its people. Since 2003, government of India has built nearly 270 educational campuses across Nepal under High Impact Community Development Projects scheme, complementing the efforts of Nepal in this area. Shringla also encouraged Nepali students to take advantage of over 3000 scholarships being provided by government of India to contribute in the development of their country and to further strengthen India-Nepal partnership.

India is also working with Nepal on reconstruction of 147 health posts and hospitals in ten districts of Nepal under a grant of $ 50 million and 28 cultural heritage sites in 8 districts of Nepal under another grant of $ 50 million.

In his last engagement before leaving Nepal that also signifies the diverse bilateral development and cultural cooperation, foreign secretary Shringla virtually inaugurated the Tashop (Tare) Gompa monastery constructed at Shree Kharka village in Manang district, the press note reads, adding that the event was also attended by secretary at the Ministry of Culture, Tourism and Civil Aviation Yadav Prasad Koirala, acharya Lama Norbu Sherpa, president of Nepal Buddhist Federation along with the representatives of Khangsar Sewa Samiti.

After completing his two-day official visit, foreign secretary Harsh Vardhan Shringla returned to New Delhi in the late afternoon today, the press note reads.

Projects under Indian assistance

• The Motihari–Amlekhgunj petroleum pipeline was the first of its kind in the region. It has created capacity to carry two million metric tonnes of petroleum products into Nepal, and has already led to savings of over Rs 800 million for the people of this country. 

• Brisk implementation of the 900 MW Arun III hydropower power project is underway, and cross-border power transmission lines have been upgraded

• The Jayanagar-Kurtha cross-border rail line should be operational shortly. It will make Janakpur so much quicker to visit from India. Tourism from India would be an important area of employment, commerce and opportunity. We want to promote it to the extent that we can.

• The modern integrated check-posts (ICP) at Birgunj and Biratnagar have transformed cross-border movement of people and goods, and work on the integrated check-posts at Nepalgunj has commenced

• After the earthquake of 2015, India cooperated with Nepal in the restoration of 30 heritage locations, including the iconic Seto Machindranath temple in Kathmandu, the Hiranyavarna Mahavihar at Patan, and the Jangam Matha at Bhaktapur. Our best domain specialists are at the service of the living history of Nepal.

• Given the young population – both in India and Nepal – education is a crucial bridge. Seventy schools and 150 health facilities are coming up in 12 districts of Nepal with Indian support. 

• The outlay of Indian earthquake-related assistance is US$ 1 billion but its true value is not in monetary terms. It lies in how it has helped communities on the ground. To cite an instance, 46,000 houses have been built in Gorkha and Nuwakot. They incorporate earthquake-resilient technologies in line with the motto of ‘Build Back Better’, and they epitomise humanity’s ability to triumph over adversity.

Nepal Infrastructure Bank to float Rs 8 billion worth shares to public

 Nepal Infrastructure Bank – established as the first and only infrastructure development bank of the country – today during its second annual general meeting (AGM) – approved the proposal to issue Initial Public Offering (IPO) of 80 million units of shares worth Rs 8 Billion to public calculated at 40 per cent of the issued capital, after obtaining the approvals of the regulators.

Chaired by Anuj Agarwal, who is also the chair of the bank’s Board of Directors (BoD), unanimously approved the director’s report of fiscal year 2019-20 and the bank’s financial statements of last fiscal year. The bank’s board members Shreekrishna Nepal, Chandra Prasad Dhakal, Lal Mani Joshi and Ramkrishna Khatiwada were also present in the meeting. Likewise, bank’s chief executive officer Anil Gyawali, deputy chief executive officer Bhupendra Pandey and other senior officials were also present in the meeting.

In order to safeguard from risks of Covid-19, the banks’ shareholders had been given an option to participate in the meeting through online platform. Arrangements had also been made to fully comply with the health and safety standards for participants, who were physically present in the meeting.

The bank, established with the objective of investing into infrastructure development projects only by raising long term resources within Nepal and from abroad, has approved loans of Rs  6 billion to five projects in hydro-electricity, cement Clinkerisation and solar energy sectors and disbursed loan of Rs 500 million during the last fiscal year 2019-20, and further approved loans of Rs 2.85 billion in additional  three projects after the review period in current financial year resulting total approved loans of Rs 8.85 billion, according to the bank.

Government, World Bank sign $450 million road support project

The government and the World Bank signed a $450 million (around Rs 54 billion) Financing Agreement that will help Nepal improve the efficiency and safety of transport infrastructure, improve efficiency of cross-border trade, and strengthen capacity for strategic road network management. This is the single largest value project that the government has signed with the World Bank.
The agreement was signed by the finance secretary Sishir Kumar Dhungana on behalf of the government and the World Bank country director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos, in the presence of finance minister Dr Yuba Raj Khatiwada.
“We thank the World Bank Group for supporting this important project, which will enhance connectivity and country integration along with cross border markets to support post-Covid-19 recovery,” finance minister Dr Yuba Raj Khatiwada said, on the occasion. “Connectivity is high on the rapid and sustainable development agenda of Nepal,” he said, adding that sustainable transport and sustainable, inclusive and high-quality infrastructure are of cross cutting importance for accelerating economic growth, national and regional economic integration and attaining the sustainable development goals.
“The project, with its focus on reducing time and cost of moving goods via key transport corridors and border crossing points, will be key to sustain and accelerate our economic growth, especially aiding recovery in the immediate aftermath of Covid-19,” finance secretary Sishir Kumar Dhungarna said after signing the agreement. “We are also looking forward to this project to introduce and demonstrate best practices in several key areas ranging from safety and climate resilience to road asset management and citizen engagement, and hoping to replicate them at the federal, provincial and local levels of the government,” he added.
The government is working on a 3R – Relief, Recovery and Resilience – strategy to help Nepal build back better from the impacts of the Covid-19 crisis, a press note issued by the World Bank reads, adding that this project will be critical for boosting economic possibilities and enhancing trade facilitation to speed up recovery and resilience. “The Strategic Road Connectivity and Trade Improvement Project supports Nepal’s connectivity and trade with neighboring countries including India.”
The project will improve the Nagdhunga-Naubise-Mugling road and upgrade the Kamala-Dhalkebar-Pathlaiya road to four-lane. The project will also enhance infrastructure, facilities and sanitation at border crossing points to ease trade constraints and spur agricultural exports. Amid the Covid-19 pandemic, the project will also support better screening of goods and people at border facilities, and develop guidance for special working arrangements, such as safe distancing and remote working.
“This project supports the government’s efforts to put Nepal on the path to economic recovery amid the impacts of the Covid-19 crisis,” World Bank Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos said, after signing the agreement. “It will help facilitate regional trade and connectivity and create jobs while ensuring safety and efficiency of the strategic roads network.”
The project will also support institutional strengthening of the National Road Safety Council and the Department of Roads, and periodic maintenance of high-traffic roads within the Strategic Road Network. A contingency emergency response component is also included in the project to reallocate project funds to support emergency response and recovery.

Nepal Infrastructure Bank to float public share

Nepal Infrastructure Bank (NIFRA) is going to float public share soon.
The bank – with paid up capital of Rs 12 billion, earning per share of Rs 6.10 and net worth per share of Rs 106.57 – holding its first annual general meeting today passed the proposal to issue an Initial Public Offering (IPO) of Rs 8 billion worth of 80 million units of share to the general public after approvals of the regulatory authorities.
The meeting – of the bank that started business from March 2019 as the first national level infrastructure development bank of Nepal – was chaired by the chairman of the bank’s board Anuj Agrawal, who addressing the meeting informed the shareholders about the achievements the bank made during the review period, the plans and goals set for the current financial year and the future strategies.
Established with the purpose of investing only in infrastructure development projects by collecting long-term resources from domestic and foreign markets, the bank has already started its process of raising Rs 5 billion from the foreign capital market by issuing an offshore bond. The bank has already approved loans of Rs 3 billion towards two hydropower projects. The bank also claimed that it is identifying and evaluating various other projects in solar energy, hotels, resorts, fun parks, cable cars, education and health. The bank also plans to expand its investment portfolio into these projects by collecting necessary resources in the near future.
During the meeting, Anuj Agrawal, Chandra Prasad Dhakal and Lalmani Joshi are elected unanimously from the promoters group, whereas Ram Saran Pudasaini represents the government as the nominated board member. Ram Saran Pudasaini, Chandra Prasad Dhakal, Lalmani Joshi and Numanath Poudel are the members in the board of the bank, where Anil Gyawali is the chief executive officer.

Contractors stage protest in front of PM's official residence

Wearing black armbands, the contractors today staged a sit-in in front of the Prime Minister's official residence at Baluwatar against the state’s repressive policy towards them.
The Federation of Contractor's Association Nepal (FCAN) is agitating against some of the provisions of the recently-issued Public Procurement Regulations-2076.
The contractors have put forth their 25-point including extending contracts to development projects, according to FCAN chair Rabi Singh. “We are forced to launch an agitation after the government failed to honour the commitments made in the past,” he said, adding that PM KP Sharma Oli himself had vowed to fulfill our demands. “We will boycott the government bidding, if our demands are not met as per the previous understanding reached with the prime minister.”
He also warned the government of halting the construction of development projects, if their demands were not met.
Singh also blamed the government for being repressive towards contractors in recent months by putting all the blames on them for every delay in projects. “The tendency of directly blaming contractors for delay in a project regardless of any cause has increased in recent times,” he said, adding that the government policy is discouraging them instead of supporting contractors and the construction industry.
Before going to premier, the FCAN also claimed that they asked Ministry of Physical Infrastructure and Transport (MoPIT) and also at the Public Procurement Monitoring Office to solve their problem but they were reluctant to address the issues.

Smart meters to be installed in 90,000 homes in Kathmandu

Nepal Electricity Authority (NEA) has planned to install smart electricity meters in 90,000 homes in Kathmandu by the end of 2020 with an aim to reduce electricity leakage in the distribution system and improve network visibility.
According to managing director of NEA Kul Man Ghising, the project will design, supply and install advanced metering infrastructure – smart meters and associated facilities – for the entire Valley and the industrial sector.
The smart meters are being installed in areas that fall under the Ratnapark and Maharajgunj distribution centres. Since fiscal year 2018-19, the Ministry of Energy, Water Resources and Irrigation had introduced a special programme in the budget to distribute smart meters in Kathmandu Valley. Financed by the Asian Development Bank (ADB), the project is under the first phase of the Power Transmission and Distribution Efficiency Enhancement Project. The $150-million project envisages modernising the electricity grid by installing advanced metering infrastructure to reduce power losses, improve collection efficiency, and manage electricity demand and outages faster, according to the state power utility.
Likewise, the consumer households with smart meters will also get a regular and accurate view of electricity consumption, besides high-quality electricity supply eliminating the need to use voltage stabilisers, and faster recovery from power outages, it said, adding that the smart meters will also enable automated billing system, and meter readers will not have to visit individual houses each month and give customers a bill. The entire system will be monitored from the NEA office like how they do at Nepal Telecom for their landline connections.
Though, the smart metering rollout programme is in its early stages, it will be deployed in various phases across the electricity distribution network across the country. “It is envisaged to conduct six smart metering pilot projects in six distribution centres by September 2020, deploy 450,000 smart meters by May 2021, some 3 million smart meters by May 2023, and 5 million smart meters in total by May 2025,” according to the ADB.
Chinese firm Pinggao-Wisdom has won the contract to install smart meters as the lowest bidder Huizhou Zhongcheng Electric Technology had submitted fake bid documents.
Pinggao-Wisdom has quoted a price of Rs 81.08 million to install 90,000 smart electricity meters.
According to the Kathmandu Valley Smart Metering Project coordinator Juju Ratna Shakya, the contractor has begun collecting meter data of the targeted households. “The contractor is expected to install and operate the automated metering system by December 2020,” he said, adding that automating the distribution network by fitting smart meters is consistent with the effort to reduce electricity distribution losses to 8.5 per cent within this fiscal year by strengthening the power delivery infrastructure.
Although the power utility has slashed transmission and distribution losses to 15.32 per cent, which has saved Rs 7 billion in the past three years, the NEA is still unable to bank in a substantial 1,156.85 gigawatt hours of energy owing to such losses.
The reduction of distribution losses is considered by energy officials to be a fundamental effort consistent with achieving Sustainable Development Goal 7 (Sustainable Energy for All) as well as Nepal’s Nationally Determined Contributions for the United Nations Framework Convention on Climate Change.
The ADB has provided $150 million as a 32-year term concessional loan at 1 per cent interest during the eight-year grace period and 1.5 per cent interest after the grace period under the distribution enhancement project.
According to the development partner, the power utility will require about $500 million to rollout 5 million smart meters across Nepal; and a major part of this amount will cover the purchase of smart meters – including communication modules – meter boxes and communication infrastructure like data concentrator units, gateways and routers.

World Bank recommends fewer than 15 banks

Though, the Monetary Policy – released by the central bank – for the current fiscal year 2019-20 failed to spell out the big merger, the World Bank has recommended the government to further reduce the number of commercial banks to fewer than 15 from current 28, within three years.
“The balance sheet size of commercial banks needs to increase to enable them to offer sensible loan volumes to support the infrastructure sector,” reads the report ‘Nepal Infrastructure Sector Assessment’ released by the World Bank on Thursday coinciding with two-day-long ‘Nepal Infrastructure Summit-2019’. The summit was organised jointly by Confederation of Nepalese Industries (CNI) and Ministry of Physical Infrastructure and Transport.
Though the report assesses the energy, transport, and urban infrastructure sectors and highlights private sector solutions for sustainable infrastructure development, it has also recommended the government to further consolidate the banking sector to enable it to finance large-scale infrastructure projects in Nepal as a short-term priority action of up to three years.
The report also suggested that that lowering the number of commercial banks to less than 15 will help in developing the domestic banking sector’s capacity to finance infrastructure projects. The report also reads that reducing the number of commercial banks from current 28 to less than 15 will start to reshape the sector and provide banks with scale and efficiency to deliver consistent loan volumes. It has also concluded that Nepal’s domestic banks and financial services institutions are fragmented, subscale, and constrained in their capacity to finance.
“The domestic banking sector can also help in meeting the finance gap in the infrastructure sector,” the report reads, adding that it requires consolidation to enable more efficient deployment of capital. “Not only the mismatch in the asset and liability makes it difficult for banks to lend in long-term infrastructure projects, it has also been making interest rates volatile in the market.”
Due to an asset-liability maturity mismatch, banks have limited ability to lend in the long term, as evidenced by the 5-to-10-year average tenure of a term loan,” the report further reads, “Bank lending is further limited by high collateral, considerable sponsor support requirements, and a lack of experience and capacity in structuring, assessing risk, and leading financing initiatives for limited-recourse financing.”
The total assets of the financial sector stood at Rs 3,137 billion ($30.46 billion) as of mid-October 2017, according to the World Bank report that has also revealed that commercial banks account for 86 per cent of the sector’s assets. “As of 2017, bank credit to the private sector equaled 77 per cent of GDP, significantly above the South Asia’s region’s average of 47.6 per cent of GDP.”
The World Bank report also reads that the further consolidation should be encouraged over the medium-term horizon along with partnerships with inter-national banks to achieve up to 10 local banks. “This can be achieved,” the World Bank report suggested, “by increasing the paid-up capital to over Rs 16 billion.” Currently, paid up capital for a commercial bank stands at Rs 8 billion, though it was four times lesser just two years ago. The central bank has increased the paid up capital to Rs 8 billion two years ago to four times from Rs 2 billion then. However, the four times increment in paid up capital in two years could not force the commercial banks to go for merger as expected also as the central bank did not restricted to issue rights shares. Almost all of the commercial banks have increased their paid up capital to four times to Rs 8 billion in two years with the help of rights shares, and bonus shares.
However, the report does not make clear on what basis it determined the number of banks that the country needs.

World Bank report highlights private sector solutions for sustainable infrastructure development

For Nepal, it is the right time to mobilise private sector solutions to close the infrastructure gap on the path to achieving the country’s growth aspirations, says the World Bank Group’s Nepal Infrastructure Sector Assessment report launched today on the sidelines of the Nepal Infrastructure Summit-2019.
The report assesses the energy, transport and urban infrastructure sectors together with cross-cutting issues and recommends interventions that combine short-term and longer-term structural and policy changes with tailored project implementation approaches to unlock private sector financing and cooperation with the public sector.
“For real benefits to accrue to Nepal’s citizens, the quality and sustainability of infrastructure services needs to improve with substantial and efficient investment,” said World Bank vice president and treasurer Jingdong Hua. “Unlocking private sector investment is key to sustainable infrastructure development to promote growth and equity and providing access to services, jobs and markets.”
Nepal’s investment needs average 10 per cent to 15 per cent of GDP annually over the next decade as the country aspires to graduate from least developed country (LDC) status by 2022 and towards middle-income country by 2030. Nepal has historically relied on a mix of public and private financing in the electricity sector and a two to four-fold increase in investment is needed to meet the country’s projected electricity demand. Likewise, public and private resources are key to developing the country’s transport infrastructure and address the issues of chronic underinvestment and improvements in connectivity and safety. Nepal is also among the fastest growing urban populations and while local governments under the federal setup are primarily responsible for public service delivery, the urban sector faces a paradoxical case of insufficient capital expenditure to meet demand on one hand and low capital spending on the other.
“The country’s transition to federalism presents a unique opportunity to define roles, establish clarity, and build a renewed, strong partnership between the public and private sector,” World Bank country director for Nepal, Sri Lanka and Maldives Idah Z Pswarayi-Riddihough said. “In our aim to maximize finance for development, a strong focus is required in the areas of governance and capacity and regulatory frameworks together with a lens on gender and social inclusion and social and environmental management.”
While public investment is integral, particularly in sub-sectors that require large investment, the report recommends creating a conducive environment for private sector participation through sector-level groundwork, sustainable project structures, systematic and strategic public investment management and project selection, and investment-friendly policies and regulations.
“Given the huge funding gap and about 30 million population eager to see speedy improvements in their quality of life, public-private partnerships (PPP) can be a useful tool for Nepal to leverage expertise and efficiency of the private sector while raising capital to meet the development needs of the country,” according to IFC Country Manager for Nepal, Bhutan and Bangladesh Wendy Werner. “IFC can bring to bear its global expertise in structuring PPP deals in addition to working with the domestic and foreign private sector to increase investments in Nepal,” he added.
The infrastructure sector assessment report follows a consultative approach to use in-depth analysis to develop a roadmap of interventions to debottleneck private sector and commercial investments. The report provides a set of recommendations for each sector in the areas of building the institutional and regulatory environment, strengthening financial viability, increasing availability of long-term finance, sectoral strengthening, developing an enabling environment for foreign investment, governance and public investment management, gender and social inclusion, and environment and social management.

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.

Infrastructure development key to achieve economic growth

Nepal can achieve its desired economic growth and development goals through the development of infrastructures, concluded speakers at a session in the Nepal Infrastructure Summit 2019 which started in Kathmandu today.
Addressing the mega event on infrastructure development – organised jointly by the Confederation of Nepalese Industries (CNI) and the government – former Prime Minister Baburam Bhattarai said that the private sector can partner in the development of planned Nijgadh International Airport and also in different other projects.
Citing that the current Kathmandu-centric urbanisation has to be linked with Tarai-Madesh, Bhattarai urged the government to take development activities also along Tarai. However, he said that the private sector might not be able to develop and operate all planned mega infrastructure projects in the country. "We gave private sector the project to develop various tunnel projects, but they failed,” he said, adding that it shows that the private sector of the country today is not in the position to invest and develop mega infrastructure projects.
Stressing on the need to connect every village with road network in a bid to expand market and raise economic activity, Bhattarai said that the government should give due priority to completing the Postal Highway, Mid-Hill Highway along with East-West Highway based on Koshi, Gandaki and Karnali river basin. “Once the government builds necessary road networks and ensure markets, the private sector will set a base for higher revenue to the government by producing products and services.”
Bhattarai, on the occasion also lamented the government that has not been able to properly complete the first industrial revolution, though the world today is in fourth industrial revolution. “As Nepal's economy still today is based on livelihood-based agriculture, the government should promote industrial and service-based economy by developing necessary infrastructure and markets," he said, adding that the private sector – at the present context – has ample prospects to raise their investment in the hydropower sector.
Likewise, vice chair of National Planning Commission (NPC) Pushpa Raj Kandel, on the occasion, said that the government has made attempts to ensure business climate in the country by making regulatory provisions friendly to doing business. Kandel also informed that the government is doing necessary groundwork to improve country's position in doing business index. “Against these backdrops, investors from India, China, USA and Norway and other countries are willing to make investment in Nepal," he said.
On the occasion, director general of the World Bank (WB) Woochong Um said that countries including Nepal should focus on development of resilient infrastructure projects considering the rising global temperature and climate change issues. Um also said that Nepal should prioritise community-based infrastructure development process so as to link Nepal's development aspirations and the Sustainable Development Goals (SDGs) adopted by the United Nations (UN). He also stressed on the effective coordination and partnership between the government and the private sector in the development.
Speaking on the occasion, vice president of CNI Bishnu Kumar Agrawal, former revenue secretary Lal Shankar Ghimire also said that business climate in Nepal has been improving in the recent years. 

Nepal, China to implement past pacts

Kathmandu and Beijing have agreed to implement agreements and understandings reached between the two neighbours in the past, and underscored the importance of exchange of high-level visits on a regular basis to develop mutual trust and confidence.
During the meeting between the foreign minister Pradeep Kumar Gyawali and state councilor and minister of Foreign Affairs of China Wang Yi, they also reviewed all important aspects of bilateral relations, according to a press note issued by the Foreign Ministry today. “They expressed satisfaction over the expanding and deepening relations between Nepal and China in recent years and agreed to further promote co-operation in various areas of mutual interest,” it reads, adding that they also agreed to continue cooperation in regional and multilateral forums on matters of mutual interests. “Gyawali appreciated China’s continued support for Nepal’s socio-economic development and underlined the need of strengthening cooperation in the fields of connectivity, infrastructure, energy and education.”
In his reply, Wang assured Gyawali of Chinese support to Nepal’s development endeavours.
During delegation-level bilateral talks between them, the two sides also exchanged substantive views on promoting bilateral economic cooperation with special focus on trade, investment and tourism.
Following bilateral talks, the two ministers witnessed signing of two letters of exchange and a memorandum of understanding (MoU). The letters of exchange are related to Hospital Recovery Project in Manang for which the Chinese side has pledged around Rs 350 million and 5,000 units of emergency shelter tents.
Likewise, the Memorandum of Understanding (MoU) on Volunteer Chinese Teachers’ Programme in Nepal has also been inked between the Ministry of Education, Science and Technology and the Embassy of the People’s Republic of China in Kathmandu.
According to the agreement China will provide volunteers to teach Chinese language in Nepali schools.
Wang also paid courtesy calls today on President Bidhya Devi Bhandari and Prime Minister KP Sharma Oli. During the meeting between Oli and Wang, the visiting minister expressed his commitment to elevating Nepal-China relations to new heights by implementing agreements reached between the two sides during Oli’s last visit to Beijing.
In the evening, Gyawali hosted a welcome dinner in honour of visiting counterpart and his delegation.
Wang, who arrived in Kathmandu yesterday evening, will meet Nepal Communist Party (NCP) co-chair Pushpa Kamal Dahal and Nepali Congress President Sher Bahadur Deuba.
The visit of Chinese foreign minister has also ensured the visit of Chinese President Xi Jinping in the near future, according to a high level official at the Foreign Ministry.

Nepal Infrastructure Summit next week

Confederation of Nepalese Industries (CNI) is organising third edition of Nepal Infrastructure Summit on Wednesday and Thursday.
“The preparations have been completed,” informed the CNI president Satish Kumar More in a press meet today. “The prime minister KP Sharma Oli will inaugurate the summit in the capital,” he said, adding that former prime minister of South Korea Dr Han Seung-soo will be the keynote speaker of the event. “Chief ministers and secretaries of all the seven provinces, National Planning Commission (NPC), and experts will take active part in the summit that is expected to help attract foreign investment in Nepal. “The CNI is going to host the summit for the third time in partnership with the government.”

Nepal is one of the cheapest destinations to visit

Nepal is one of the cheapest destinations to visit in the world, according to the Travel and Tourism Competitiveness Index (TTCI) published by the World Economic Forum (WEF) last week.
The report placed Nepal in 15th position – among 140 countries – in terms of price competitiveness, behind countries like Iran, Egypt, Kazakhstan and India. Nepal trails behind India (34th) and Sri Lanka (77th) in terms of travel and tourism competitiveness in South Asia.
Nepal has also been ranked 91st in terms of safety and security, according to the Travel and Tourism Competitiveness Index that has stated that Nepal lagged behind when it comes to air quality and ground infrastructure. “Nepal ranked 134th in terms of environmental sustainability, 131st on ground and port infrastructure, and 126th on tourism service infrastructure.”
The WEF report also revealed that South Asia ranks low on infrastructure, with underdeveloped tourist service infrastructure representing its greatest relative disadvantage, apart from low information and communications technology readiness, international openness, safety and security, and health and hygiene.
The report – published by the Switzerland-based WEF every two years – has ranked the 140 economies in four sub-indexes: enabling environment, travel and tourism policy and enabling conditions, infrastructure, and natural and cultural resources. “Together, these four sub-indexes include a total of 14 pillars, which are used to score a country's overall travel and tourism competitiveness,” it reads, adding that the top five performers in the world are Spain, France, Germany, Japan and the US.
Price competitiveness – the only category in which Nepal performed better – is measured by comparing costs relating to airfare ticket taxes and airport charges, which can make flight tickets much more expensive; the relative cost of hotel accommodation; the cost of living, proxied by purchasing power parity; and fuel price costs, which directly influence the cost of travel.
Though, there has been a debate on either to make Nepal a cheaper destination or not, the country is observing Visit Nepal Year 2020 aiming at welcoming 2 million tourists in a year. Last year Nepal received some 1.17 million foreign visitors, though their spending plummeted to a seven-year low as Nepal has been increasingly sold as a budget destination also due to the influence of platforms like Aand Oyo, online marketplaces for arranging lodging services that match budget-minded travelers.
According to the Tourism Ministry, the average spending per tourist per day has dropped to $44 last year, the lowest in seven years. “The average spending stood at $54 per day in 2017,” the data revealed, adding that in 2003 – even during the height of the Maoist insurgency – per day spending of tourists was at a record $79.1.
However, the travel tourism entrepreneurs claim that the increasing online payment system in Nepal’s hospitality industry made it difficult for the government to find out the real revenue earned.

India builds educational institution in Kathmandu

Ambassador of India to Nepal Shri Manjeev Singh Puri inaugurated campus building of Koteshwor Multiple Campus in Kathmandu today.
CPN-UML leader and former foreign minister, and also chairperson of College Management Committee Mahendra Bahadur Pandey, former foreign secretary Madan Bhattarai and chairman of District Coordination Committee (DDC) Shiva Sundar Raj Vaidya alongwith the political, community leaders also attended the inaugural ceremony.
Koteshwor Multiple Campus – established in 1990 – is a non-profitable non-governmental, service oriented community college situated at Koteshwor in Kathmandu. Affiliated with Tribhuvan University (TU), it offers management, education and humanities in Bachelor level and Management in Masters Level. With affiliation from National Examination Board (NEB) it offers Ten plus Two programme in management, education and humanities. The campus has over 3,700 students, about 60 per cent of whom are girls.
“The new infrastructure constructed with the Government of India’s grant assistance of Rs 45.10 million, is a three storied building comprising total of 18 class rooms, including room for campus chief, examination, administration, accounts faculty and store, and also separate sanitation facilities for boys and girls, reads a press note issued by the Indian Embassy in Kathmandu.
The newly built infrastructure is expected to boost learning environment of students, it reads, adding that Government of India is happy to be associated with the project which compliments effort of Nepal in augmenting infrastructure in the field of education. 

India builds Shree Schoolchaun Higher Secondary School in Jhapa

Attorney General Agni Prasad Kharel and ambassador of India to Nepal Manjeev Singh Puri today jointly inaugurated the School Building of Shree Schoolchaun Higher Secondary School at Gauradaha Municipality-05 in Jhapa district.
Minister of Internal Affairs and Law of Province No 1 Hikmat Kumar Karki and chairman of Jhapa District Coordination Committee (DDC) Somnath Portel were also present during the inauguration session, where political and official representatives of government, State Government of Province No 1, community leaders and a large number of friends of the India-Nepal partnership participated.
Established in 1965 as a primary school and subsequently upgraded to Higher Secondary level in 2008, Shree Schoolchaun Higher Secondary School is affiliated with National Examination Board (NEB) and offers plus two  (10+2) programmes. The school has about 1150 students of which 60 per cent are girls. Shree Schoolchaun Higher Secondary School is an educational institution of repute in Jhapa District.
The new infrastructure constructed with government of India’s grant of Rs 35.70 million, is a two-story-school building comprising 25 class rooms, including one room for laboratory, one room for principal, one room for library, one room for staff, one room for accounts section, multipurpose-hall, separate toilets for boys and girls on each floor, compound wall and furniture, according to a press note issued by the Embassy of India in Kathmandu.
The newly built infrastructure is expected to boost learning environment of students. Government of India is happy to be associated with the project which compliments effort of government in augmenting infrastructure in the field of education, the press note adds.

Nepal Infrastructure Summit in September second week

The Confederation of Nepalese Industries (CNI) is organising Nepal Infrastructure Summit on September 11 and 12. It is expected that the summit this year will be attended by around 500 investors from Nepal and foreign countries.
“The purpose of the investment summit is not only to attract investment but also to learn about the practices of developed countries in terms of infrastructural development," said vice–president of CNI Anuj Agarwal, at a press conference organised in the capital today.
The CNI – through the summit – aims at forging networks and alliances in the region for seamless connectivity and shared growth, and also to prioritise the delivery of green, climate-resistant infrastructure projects to achieve Sustainable Development Goals (SDGs), he added.
“The CNI has also prepared a report on infrastructure development after two infrastructure summits held in 2014 and 2017 in collaboration with Sarwangin Bikas Adhyan Kendra," according to CNI president Satish Kumar Moore. “The report will also be launcehed during the summit.”
Prior to the summit, the CNI is also organising provincial infrastructure meets in various provinces to collect local issues that could be discussed at the summit.
“Former Prime Minister of South Korea Han Seung-soo will be the keynote speaker for the event,” he said, adding that the summit will also be a follow-up of Nepal Investment Summit 2017.

Provincial budgets follow wrong precedent of federal budget, distribute budget to parliamentarians

Following the wrong precedents of the federal government, the provincial governments distributed the budget to parliamentarians, in one name or the other, which is a gross misuse of the public tax money. 
Unveiling their third budget – though practically second one as provincial election was not completed then – nearly three weeks after the Federal Budget 2019-20, the seven provinces, however, claimed that they have focused on infrastructure including including cable car, monorail and tunnel roads, and social development.
The provincial governments tabled a total budget of Rs 2. 596 trillion. The provincial budget has increased by 25.55 per cent compared to last fiscal year’s budget. Province 3 has tabled the highest budget of Rs 47.50 billion, whereas Far West Province has tabled the lowest at Rs 28.16 billion.

Province 1
Province 1 Minister for Economic Affairs and Planning Indra Angbo tabled a budget of Rs 42.20 billion. “Of the budget, Rs 18.54 billion is allocated for recurrent expenditure and Rs 23.57 billion for capital expenditure,” he said, adding that education sector will receive Rs 1.28 billion, drinking water and sanitation Rs 3 billion, and irrigation will get Rs 3.2 billion.

Province 2
Province 2 government presented a budget of Rs 38.72 billion. “Out of the total budget, Rs 19.11 billion was allocated for recurrent expenditure, whereas Rs 19.26 billion is for capital expenditure,” the Province 2 government said adding that the government has announced Rs 30 million for each constituency in accordance with the Constituency Infrastructure Development Special Programme. “The budget has also focused on agriculture, education and health.”

Province 3
Province 3 Minister for Economic Affairs and Planning Kailash Prasad Dhungel announced a budget of Rs 47.6 billion for the next fiscal year. “The budget has allocated Rs 24.46 billion for recurrent expenditure and Rs 22.03 billion for capital expenditure,” he said, adding that the budget will focus on developing infrastructure including ring roads and tunnels across several parts of the Province, tourism development, agro-sector modernisation, and community farming.

Gandaki Province
Gandaki Province Minister for Economic Affairs Kiran Gurung tabled a budget of Rs 32 billion. “Of the total budget Rs 12.28 billion as been allocated for recurrent expenditure and Rs 19.85 billion for capital expenditure,” he said, adding that the government has focused on programmes and policies announced from the last fiscal. “Additionally, it has allocated ample funds for the construction of ‘national pride projects’ within the province.”

Province 5
Province 5 Chief Minister and Economic Affairs and Planning Minister Shankhar Pokharel announced the budget of Rs 36.41 billion for the next fiscal year. “Rs 13.45 billion has been allocated for recurrent expenses and Rs 18.57 billion for capital expenditure,” he said, adding that the budget has given top priority to infrastructure and tourism development, agriculture sector commercialisation and mobilising the sector to eliminate unemployment, and completion of Gautam Buddha International Airport.

Karnali Province
Karnali Province Minister for Economic Affairs Prakash Jwala unveiled a budget of Rs 34.35 billion. “The budget has allocated Rs 13.05 billion for recurrent expenses and Rs 21.29 billion for capital expenditure,” he said, adding that the Karnali Province government has prioritized agriculture, infrastructure and tourism sectors, setting up the Karnali Infrastructure Development Authority as part of the budget allocation of Rs 1.2 billion for the infrastructure sector.

Sudurpaschim Province
Sudurpaschim Province Minister for Economic Affairs Jhapat Bahadur Bohara tabled a budget of Rs 28.16 billion today. “The budget has allocated Rs 12.57 billion as recurrent expenditure and Rs 13.06 billion as capital expenditure,” he said, adding that the government has prioritised agriculture, drinking water, energy, irrigation, infrastructure and roads. “The budget has also focused on promotion of a model agriculture village with Rs 5 million budget for every local unit.”