Event: Nepal Investment Summit

Nepal has successfully transitioned from a past marked by violence and strife to a period of peace and stability. It is now looking to usher in a period of growth by revving up its economy. It was against this backdrop that it organised the Nepal Investment Summit 2019 recently.

The summit attracted 300 companies from 40 countries including 735 delegates. In addition, 100 domestic companies along with 600 delegates attended the two-day summit.

The Investment Board Nepal showcased 77 projects in hydro power and infrastructure sectors and signed 15 MoUs. The event concluded on a high note with the Nepal government promising support in terms of actionable implementation of the MoUs and flexibility in the policies to accommodate the inflow of foreign funds.

The highlight of the summit was a high-level round table discussion chaired by Yuba Raj Khatiwada, Nepal’s Minister for Finance, and attended by senior officials from CDC, Asian Infrastructure Investment Bank; FMO, IFC, World Bank, MIGA, Standard Chartered Bank and Asian Development Bank. It discussed key investment drivers such as economic transformation and policy reforms that will make Nepal conducive for investments and instil confidence in investors.  It also discussed the challenges faced by the Nepal government in implementation of the investments as well as  sharing neighbouring countries strengths and growth strategies.

Nepal’s Untapped Sectors
Nepal’s underexploited hydropower sector was a subject of much discussion. It was stated that with an abundance of hydro resources at its disposal, Nepal can easily become an exporter of power to the neighbouring countries. For this, it had to encourage private sector investment, improve tax regulations and streamline and prioritise resource allocation. The time was just ripe for all this as Nepal had gone through a peace process and the new constitution had set the stage for investments in the country.

A key concern was the pace of execution, though, and the need for the government to work more closely with the private sector. Khatiwada sought to allay this concern by saying, “We are moving towards giving higher power to the private sector who are the catalysts for our growth and sustained development of the country.”

 Maha Prasad Adhikari, CEO, Investment Board Nepal said, “Currently, the government’s priority is on building infrastructure for utilisation of hydropower energy. We have a capacity to generate 43,000 MW of electricity but we are only generating 1,100 MW. However, we are working on the transmission facility which will allow us to provide the full range of services using technology.”

On a separate note, Adhikari said that being surrounded by two of the fastest growing economies of the world presented an opportunity for Nepal to grow and undertake capacity development.

According to him, “On an average, 200 million people tour out of India and China every year and we are expecting only 1 per cent of them coming to Nepal, which is 2 million a year, and if the tourish turnout is 2 per cent, then we can get 4 million tourists. Our target is to get 5 million tourists in the next 10 years.”

He informed that in view of the infrastructure development underway, Nepal will be able to accommodate 2.5 million tourists in the next couple of years.

Referring to private-public-partnerships (PPP) and financing mechanisms, Finance Minister Khatiwada said, “Nepal is targeting to get $20 billion a year. The government spends $5 billion a year and requires another $15 billion to achieve double-digit growth. The private sector can get $5-6 billion. Therefore, Nepal needs almost $10 billion of foreign investments to have an exponential growth and to become a middle-income economy.”

Investments & Challenges
Participants representing global development financial institutions as well as loval entrepreneurs shard their views on the summit and the way forward.Srini Nagarajan, MD & Head – South Asia, CDC Group said,”Every economy has challenges and Nepal has its own. They need to work around the policy framework and provide a vibrant exit policy. All development financial institutions should enable a  financial framework.”

According to Faris Hadad-Zervos, Country Manager, Nepal for Word Bank, “From investment perspective, ideas are flowing at the right time. A series of reforms have been taken up by the government which are an important first step. It is the best time to invest in Nepal. However, there should be more focus on technology.”

According to Tim Gocher, Founder, Dolma Fund, “With Nepal having a stable and long-term elected government, it is a positive sign for legislative improvement and one can feel confidence due to the pipeline of deals.”
 
Rajan Sharma, CEO, Quality Freight Services of Nepal called for technical collaboration to empower local businesses. “We are small entrepreneurs with funds but are struggling with technological knowledge. I fear if too many large foreign players come into Nepal with huge capacities, small businessmen like us might vanish,” he said.

Anand Bagaris, who runs an agri processing business, signed an MoU with India’s National Collateral Management Services (NCML). “Our farmers lack the right market and price for their produce,” he said. Shardindu Vajpayee , MD, Amicorp Advisory Services, India, who had came looking for investment opportunitie, said that they were in the process of signing deals for a PPP model in infrastructure ,technology, etc.