The post Foreign Aid to Nepal: World Bank Tops, Govt Eyes Capacity Development appeared first on Nepali Sansar.
]]>The Development Cooperation Report 2018 released by the Finance Ministry on January 16, 2019 showed a 16 percent rise in foreign aid disbursement to Nepal (USD 1.62 billion) in the ended fiscal.
World Bank topped the list of aiding agencies with USD 533.51 million support, showing a 54 percent year-on-year rise in funding.
Asian Development Bank (ADB), United Kingdom, USAID and European Union stand as the major contributors.
Majority of the funding was focused on economic reforms, education sector, health, urban development and local infrastructure development.
It is noteworthy that the World Bank’s funding to the nation has increased during and after the 2015 earthquake. Even the other agencies also showed a growing trend with regard to offering financial support post the earthquake incident.
Top-5 Disbursements from Global Funding Agencies Aid to Nepal- A Glance at Comparison (in NPR)
Funding Agency |
FY 2014-15 (Earthquake Year) (USD Million) |
FY 2017-18 (USD Mn) |
World Bank |
188.12 | 533.51 million |
Asian Development Bank (ADB) |
147.89 |
291.69 million |
United Kingdom |
168.07 |
123.87 million |
USAID |
132.37 |
117.83 million |
European Union | 31.37 |
117.83 million |
Of the total disbursed amount, 50.5 percent of the fund came in the form of loan, 35.1 percent in grant and 14.4 percent as technical assistance.
It is notable that 78 percent of the foreign aid has come under in line with the budgeted requirements, reflecting in the government’s annual budget book.
The United Kingdom emerged as the top-3 donor after the world’s leading funding agencies, while Nepal’s closest neighbors did not appear in the list and were at 8th and 9th positions, respectively.
India’s contribution to Nepal during the year was USD 56.76 billion, down 4.2 percent year-on-year.
Economic sector topped the list with regard to sector-wise receiving of funds, followed by education sector, urban development, health, local development, energy and housing.
“The increase in disbursement was due mainly to the implementation of ‘First Programmatic Fiscal and Public Finance Management Development Policy Credit’ funded by the World Bank,” said the report.
Finance Minister Yubaraj Khatiwada is hopeful that the donations would further go down as Nepal is moving on the path of development with good number of institutional reforms and enhancing its capacity to pay-back loans.
It’s clear. Drop in grant means our loan will grow,” he told a press conference on Wednesday. “As Nepal aims to graduate to the league of developing nations by 2022, we will have to focus on mobilizing the loans received under the low interest rate more prudently and in a transparent manner,” says the Minister.
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]]>The post Nepal Mulls Credit Assessment for Foreign Investment appeared first on Nepali Sansar.
]]>The government is keen on engaging globally-renowned agencies to assess the country’s sovereign credit rating so as to determine the risk of doing business in Nepal.
In this regard, the Ministry of Finance has already sought support from donor agencies, primarily the Department for International Development (DFID), to study the credit risk.
According to the Revenue Secretary Sishir Kumar Dhungana, DFID has extended its support to help the Himalayan nation in finding an appropriate credit rating agency along with determining the modality of planned credit rating.
US-based Moody’s has already approached the government with its modality for measuring the creditworthiness of Nepal, informed Dhungana.
“We’ll wait for a few more suggestions to the government from donor agencies and rating companies in this regard. However, the process of credit rating of Nepal will begin in a few months,” Dhungana adds.
Dhungana feels that this move would give Nepal an access to international bond markets and thus raise foreign funds for local investment.
Government feels that this move will help Nepal recover from the past records that report the risk of doing business in the country and help draw more foreign investment.
Private sector players also feel the same in saying that this rating would increase the predictability of investment and doing business in Nepal, which is key to gain investor confidence.
“Unrated countries are generally taken as high-risk zones by investors. Though Nepal might secure poor ranking in the credit rating, it will help identify existing drawbacks in the business environment of Nepal and alert the government to adopt proper precautions,” said Hari Bhakta Sharma, president of the Confederation of Nepalese Industries.
Sovereign credit rating measures the trustworthiness of a business environment and credit risk associated with the fund borrower, which could be an individual, company or any sovereign entity.
This would help investors to plan their investment taking into account the host’s political, financial and social abilities.
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]]>The post Major Business Investment Opportunities in Nepal appeared first on Nepali Sansar.
]]>Driven by the long-awaited political transformation, the country is currently riding high on development agendas inspired by the recent progress it has seen in various fields.
In the process, the country is paying high regard to development at the local level and is welcoming stakeholders from across the world to tap its untapped potential.
Nepal is rich in natural resources that make the country viable for potential investment opportunities. Its perennial water bodies such as lakes and rivers flowing round the year and wide forest cover offering favorable climate speak the country’s energy potential, and abundant hydropower source is one that the country boasts of! Do you know Nepal accounts to nearly 3 percent of the world power generation through its hydropower sector?
This clearly illustrates the country’s investment potential in hydropower sector! Taking it further, the country has been welcoming both local and global partners to invest in its hydropower projects. Few attempts by Nepal Government made in this regard include Himalayan Hydropower Expo 2018, inviting Bangladeshi investment, welcoming foreign investment in mega hydropower projects, developing national-pride projects, encouraging power trading with friendly nations, among various others.
Besides, the country has also been promoting clean energy solutions as part of its transition to green vehicles run by biofuels, electric vehicles, LPG-free mission, and various other initiatives.
Apart from this, the country has also been advocating for environmental protection measures through its eco-friendly policies, waste management techniques and has also been actively developing model villages like Dhankuta that have set classic examples for successful implementation of such measures.
So, definitely there is lot more that the country’s energy sector offers for potential investors!
Nepal is an agriculture-driven nation and offers rich potential in the agriculture sector. The country produces varieties of crops all through the year and is known for its traditional forms of farming through organic methods. Owing to this rich potential and growing middle-class population, most experts believe agriculture will be one of the top Nepali sectors with huge investment potential over the next 20-30 years.
Tourism forms the backbone of Nepali economy. Tradition, heritage and the country’s world-famous tourism centers (some of them the UNESCO Heritage sites) speak the tourism potential of Nepal. Making major strides over the years, the country is now aiming at a 2 million tourist arrival target under its Visit Nepal 2020 campaign. Under its tourism development plans, the country is also keen on developing more regions as tourism hubs, making it an opportunity for potential investors. Medical tourism is another key sub-area connecting tourism and healthcare sector with huge investment potential.
The rise in tourism activity in any country means increasing public movement across that country’s famous destinations. This directly reflects in the growth of the hotel & hospitality industry of that specific market. So, is the case with Nepal. Increasing tourism activity led the country to plan big on its hotel industry to woo tourists. Towards this end, the government is also pushing for more investment on the development of luxury hotels that match the requirement of tourists of any range. Such potential investment opportunities in the Nepal Hotel & hospitality industry.
Mining is another industry where Nepal holds rich investment potential. The rise in food inflation and demand for luxury living among populace leads to the demand for precious metals. Besides, money savings also involve the saving of precious metals as an investment in banks for good returns. Apart from that, manufacturing of electronic and electrical equipment, among other areas demand usage of metals. All these factors mean high demand for metals. So, the mining industry is definitely the one with huge investment potential. Experts believe the Nepali mining industry holds good potential for the future.
Efficient healthcare services are still a distant goal for Nepal and is in dire need of healthcare services as a result of weak healthcare infrastructure. Global and local healthcare surveys show a high number of rural Nepalis suffering from some form of the disease. Besides, vulnerability to natural disasters that also affect basic amenities like food and water poses serious healthcare challenges to Nepalis. To address health concerns at all levels, the country needs a well-built healthcare infrastructure which would require investment. So, given the existing weak healthcare outreach, the untimely supply of medicines to the needy and other concerns, the country is definitely in need of investment in the healthcare sector.
Quality food is what everyone looks for a safe and secure living. Despite being an agri-driven economy, Nepal often faces challenges in the food industry, which could be a shortage of supplies, inability to store agricultural produce, implementation of improper methods in growing food, feeding the right food to children, among others. So, investment in food industry can address the aforementioned challenges and fulfil the industry’s infrastructure towards providing a quality and healthy food.
The world is currently witnessing the start-up culture. With a large youth population, Nepal is undoubtedly a country with huge start-up potential. All ideas that stem up might not have financial backing at times. So, this is where investment steps in. Potential investors have ample opportunities to invest in Nepal’s start-up industry that is today witnessing a good rise owing to interest among youth to develop something new. Besides, there are also many Small Medium Enterprises (SMEs) in dire need of financial support for continuing their business.
Nepal is currently undergoing fast-paced development, which sheds light on its infrastructure sector, especially transportation. As part of its development initiatives, the government has already planned huge investment on transport infrastructure development including roads, railways, and airways. Considering the weak local infrastructure, the country would definitely welcome investment in developing the local transport infrastructure, to facilitate internal movement, trade or connectivity with other nations.
Nepal holds huge potential in Information Technology. Increasing internet penetration and growing mobile usage, all driven by digital trend, are boosting IT trend in Nepal, resulting in huge demand for the industry. Besides, integration of IT solutions like apps in every other sector is adding to the industry’s potential. So, is the huge scope for potential investment in Nepal IT industry, which is currently at a budding stage.
Education is one key sector that is awaiting a huge support in Nepal. From primary level education to a higher level, Nepali education sector is still yet to reach its full potential, both in terms of standards and infrastructure. Though many countries and donor agencies have come in support, Nepali education sector is still open for huge investment towards the improvement of institutional infrastructure, access to remote communities and teaching standards and offering advanced courses at the higher level.
Migration is one common word we keep hearing in case of Nepal, as many of the country’s populace move out to foreign destinations for some form of employment. Today, Nepalis can be spotted almost in every country in skilled or unskilled jobs. So, the country definitely holds huge potential in domestic employment, which is today facing serious challenges. On the other hand, the government is putting its efforts to boost employment opportunities locally through various skill training programs, among others, which directly means the scope of development in Nepali employment sector.
Telecommunication sector in Nepal is already performing its bit in meeting the local needs. However, increasing mobile usage and internet users is posing more challenges to the sector to rethink on its strategies to meet the growing user demands in terms of connectivity and data services. So, the sector definitely holds high investment potential.
The requirement on one side, there should also exist a supportive environment to invest in any area. Following factors explain the openness of the investment climate in Nepal:
1) Foreign Direct Investment
Nepal has in place a special Investment Promotion Board, chaired by the Prime Minister, to attract foreign investments across sectors and boost the economy. So, potential investors can also get the best out this great opportunity that Nepal offers through its Board. Besides, the government has proactive in welcoming Foreign Direct Investment in various domestic sectors thus encouraging foreign investment in the local projects.
2) Ease of Doing Business
Nepal Government always had a conducive environment for potential investors, majorly because of improving ease of doing business. Very recently, the country has moved two points up in its global Ease of Doing Business ranking. The World Bank’s Doing Business (DB) 2018 reported rise in Nepal’s doing business index to 105th position, citing the country’s improvement in key areas such as protecting minority investors, starting a business, registering property, paying taxes, trading across borders, enforcing contracts, resolving insolvency, among others.
3) Easy Human Resource
A majority percentage of working population make Nepal a suitable place for investment. Owing to the country’s budding stage, there will be a huge demand for employment opportunities, which makes human resource availability easier and boosts profitability for investors investing in or developing local projects. One can find cost-effective labor in Nepal whose wages are usually around USD 76 per month.
4) Strategic Position
Nepal is of high importance for the world because of the two Asian giants, India and China, neighboring it. As the country enjoys duty-free access on its trade with the two countries, that makes it easier for the investor to leverage the advantage of imports at a lower cost. Besides, natural resources that support any project such as water and electricity are also rich in Nepal, which make it more suitable.
The Conclusion
Overall, Nepal holds huge investment potential in almost every sector owing to its ongoing development that is currently at a budding stage in majority areas. Undoubtedly, Nepal offers potential investment prospects for potential investors!
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]]>The post Foreign Investment in Nepal At Threefold Rise in FY’18 appeared first on Nepali Sansar.
]]>The FY 2017-18 that ended in the mid of July 2018 saw foreign investment in Nepal soaring at a new high of Rs 61 billion, a threefold rise year-on-year.
Nepal’s earnings of Rs 61.094 billion in FY 2017-18 is 109 percent higher than what was received in FY 2016-17, which was at Rs 20.85 billion, informed Khagendra Bahadur Basnet, Chief of Foreign Investment Division, Department of Industry, Nepal.
Energy, mining, forest & agriculture, ICT and tourism were among the top Nepali sectors as the most-sought investment destinations for foreign investors during the fiscal.
According to Basnet, foreign investors have so far invested in more than 4000 industries of Nepal, with India and China topping the list as major investors in terms of spending with more than Rs 80 billion and 70 billion separate investments.
“The state of foreign investment was hopeless in Nepal due to the armed conflict and the political stability that followed. But, the investment has significantly increased in FY 2017-18. We hope it will increase further in the next year, says Basnet.
Also Read : Nepal’s Capex at 5-yr-high in FY’18, Delays Continue
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]]>The post Nepal Power Investment Summit 2018: Potential and Investment Discussed appeared first on Nepali Sansar.
]]>The second edition of the three-day Nepal Power Investment Summit 2018, held during January 27-29, 2018, saw the participation of renowned personalities from international bodies such as SAARC, BIMSTEC and ASEAN, global leaders and investors, ambassadors, bankers, ministers and businessmen, among various other key delegates from different parts of the world.
A total of 350 delegates from 24 countries including China, Korea, Europe and the United States, around 100 participants representing 30 international companies and around 400 participants from Nepal including policymakers and private sector players took part in the summit.
As part of the summit, various government and industry experts expressed their views on Nepal’s energy sector and its potential.
Inaugurating the summit on January 27, 2018, President Bidya Devi Bhandari called on the global and local investors to tap the untapped hydropower potential of Nepal.
“We need capital and technology for the implementation of large scale hydropower projects and the government will accord top priority to attract foreign investment and technology. The investors will also benefit from the growing demand for electricity in Nepal as well as South Asia,” said the President in her inaugural address.
In this regard, she promised an investor-friendly environment in line with their interests and needs to all the players coming forward.
Highlighting Nepal’s strong energy potential, Indian Ambassador to Nepal Manjeev Singh Puri said the country should act fast in implementing the hydropower projects considering the inclination towards renewable energy projects at the global-level.
“In the backdrop where solar power is getting cheaper day by day, hydropower will lose its competitive advantage to solar energy soon. Therefore, Nepal should act fast in developing the hydropower projects,” said Puri in his keynote address.
He went on to say that Nepal should start mega energy projects for both employment generation and economic development and to stay ahead in competition.
“Nepal should immediately start developing large projects to provide energy at competitive rates,” he added.
Though Nepal’s energy policies for foreign investors look promising, the government agencies working in the process need to pace up the rate at which they implement the projects, say the energy industry experts.
“We are the private sector who looks maximized return within short period of time, but here in Nepal we have to invest more than five years doing basic things, getting approvals and clearances,” said a Vietnam-based businessman who participated in the summit.
The experts also lauded the Government of Nepal’s power purchasing policies in USD term, ease in removal of land ceiling for big hydro projects and management of technical human resources as some of the notable developments required for attracting foreign investment.
Speaking at a panel discussion on ‘FDI in Nepal’s Power Sector’ held as part of the summit, various energy industry experts and investors called for innovative ways of financing in the Nepali hydropower sector.
“Since hydropower projects are capital intensive and have longer gestation period, innovative financing solutions like equity financing is the need of time,” says a Nepal-based private industry player.
The panel speakers also pitched for independent regulatory body to check the demand and supply along with fixing energy tariff in the country.
According to the summit organizer, Energy Development Council (EDC), this summit is aimed at creating a platform to ensure one-step business and business expansion in the energy sector while matching the interests of industry players.
The summit was hosted a participant-investor platform allowing participants to meet investors for a debt financing of around
USD 5-20 billion for various power projects including solar, wind and hydro energy.
Speaking on the occasion, EDC Chairperson Sujit Acharya highlighted that Nepal holds a 40,000MW electricity generation potential over the next 10 years.
“The resources needed for harnessing hydropower to that level could be available from the international financing institutions under Engineering, Procurement, Construction and Financing modality,” he added.
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]]>The post Nepal Expects 30% Rise in Revenue Collection in FY 2018-19 appeared first on Nepali Sansar.
]]>According to the Ministry of Finance (MoF) Nepal, the revenue collection over the next fiscal is expected to see a 30 percent rise standing at around Rs 950 billion, around Rs 220 billion more than the current fiscal target of Rs 730 billion.
According to Finance Secretary Shankar Prasad Adhikari, this target can be achieved through control of under-invoicing practice and boosting inland tax revenues such as Value Added Tax (VAT) and Income Tax (IT).
“The target is quite ambitious, but if we’re able to control under-invoicing, we’ll be able to achieve it,” says Shankar Prasad.
The government is also planning to increase revenue generation through domestic debt to Rs 153 billion from the previous year’s revenue of Rs 145 billion.
“If the economy grows by six per cent this fiscal, we can easily raise Rs 153 billion through domestic debt, which is an ideal ratio of domestic debt to gross domestic product,” says Prasad.
Besides, the Finance Ministry is also expecting Rs 17 billion surplus revenue from the unspent budget of the current fiscal.
Apart from this, the government’s reliance on foreign aid for grants, loans and technical assistance for budget financing is expected to touch the Rs 450 billion mark.
The government’s dependence on the foreign funding is expected to see a substantial rise in the coming fiscal to meet the domestic development needs across provinces and local bodies.
Towards this end, the government is planning to welcome around Rs 286 billion as foreign investment.
The current fiscal saw a budget allocation of Rs 232 billion with Rs 225 billion for local bodies and Rs 7 billion for provincial levels.
The new Nepali Government, yet to be formed, will undertake the formulation works of new budget for 2018-19 fiscal.
The initial estimation of the federal budget for the 2018-19 fiscal is yet to be presented at the Resource Committee meeting led by the Vice-Chairman of the National Planning Commission (NPC) of Nepal.
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]]>The post US Envoy Calls for Strong US-Nepal Economic Ties appeared first on Nepali Sansar.
]]>The United States Ambassador to Nepal Alaina B Teplitz said this in her address at a monthly lecture and policy discussion series on US-Nepal bilateral relationship: The Next 70 Years and Beyond, held in Kathmandu on December 19, 2017.
Collaborative partnership towards ensuring transparency and accountability, and successful inclusion of women and marginalized communities are among other key areas of cooperation for both the nations in the future, Alaina added.
Stating that both the nations have already started redesigning their development strategies, she called on the Government of Nepal to ensure an investor-friendly environment to attract more investment.
In this regard, she urged the new Nepali Government, led by the Communist Alliance, to introduce investor-friendly foreign investment bill and agro-business promotion bill to ensure Nepal’s overall economic development.
The former Nepali Ambassador to US Shankar Sharma highlighted US’ potential in tourism, among other areas, while also highlighting Nepal’s strength in export of goods to US.
“Although China and India are set to emerge as the world’s largest economies in coming years, the position of US will be more valuable for Nepal even in the days to come,” read Shankar’s official statement.
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]]>Nepal has drawn a wide global attention in the recent times and as a result, the global business community has also been expressing its willingness to invest in Nepal, every now and then.
India for infrastructure development, South Korea for smart city development, US in energy and education sectors, likewise, many other countries have come forward to invest in Nepal in the recent times.
In the recent past, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Austrian Federal Economic Chamber (AFEC) have also signed a new agreement to boost business and trade ties between the two countries.
Following the trend, now the Japanese business community and Non-Resident Association (NRNA) Korea have also expressed their willingness to invest in Nepal.
“Foreigners would benefit by investing in Nepal, as the country is a gateway to reach out to markets of India, China and other South Asian countries,” says the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Bhawani Rana.
An official statement in this regard was made by the Japan Chamber of Commerce and Industry, Singapore (JCCIS) President Tochiori Takuhiro.
A 12-member JCCIS team, including eight Japanese companies that expanded their base to Singapore, has come to Nepal on November 06, 2017, to assess investment climate in the country and discuss cooperation in various sectors.
The companies in the delegation belong to various sectors such as textiles, manufacturing, tourism, banking, logistics, oil and gas.
“We are here because we see an opportunity in this country as it has young workforce and other potential to grow. Lately, the government has also started taking serious initiatives to attract Foreign Direct Investment (FDI), which is encouraging,” says Tochiori Takuhiro.
Tochiori was speaking at an interaction program organised by FNCCI on November 07, 2017.
On the occasion, Tochiori further informed that the team would meet domestic entrepreneurs of various sectors, over the next three days, to finalize the areas of cooperation.
In a recently-held meeting with the Nepali trade delegation of 14 Nepal-Korea Chamber of Commerce and Industry (NKCCI) members and 9 hoteliers, NRNA Korea has also expressed its willingness to invest in Nepal.
The Hotel Association Nepal (HAN) informed this in an official statement on November 07, 2017.
During the B2B meeting organized by Korea Trade-Investment Promotion Agency (KOTRA), officials of NRNA Korea expressed commitment to work for bilateral trade and tourism promotion,” said HAN.
According to HAN, the delegation participated in an event called G Fair Korea and has also organized a trade promotion program titled- ‘Nepal: Your Destination for Tourism and Trade’.
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]]>The post New Constitution Favored FDI Inflow into Nepal, Says Official appeared first on Nepali Sansar.
]]>Nepal witnessed a Foreign Direct Investment of Rs 15.17 billion in the 2016-17 fiscal year, informed the Department of Industry (DoI).
Out of the total foreign investment made in country’s 395 industries, big industries attracted a total foreign investment of Rs 6.22 billion share, followed by medium industries (Rs 1.17 billion) and small (Rs 7.61 billion).
According to the DoI Secretary Durga Prasad Bhusal, FDI into the country started increasing with the passage of country’s new constitution on September 20, 2015.
Meanwhile, General Secretary of the Federation of Nepal Cottage and Small Industries Dambar Prasad Regmi urged the government to formulate investor-friendly policies to attract more foreign investment.
China topped the list of investors with Rs 6.24 billion investment in total 183 industries of the country.
India stood second in the list with Rs 1.99 billion in 40 industries, followed by the United States (38 industries), South Korea (15), Japan (12), the United Kingdom & The Netherlands (9 each), France (8), Bangladesh & Switzerland (7 each), Germany (6), and Belgium & Canada (5 each).
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