To develop an enabling environment for FDI in the infrastructure space in Nepal, it is imperative for the government to coordinate with all relevant stakeholders to develop a pragmatic, accessible and replicable hedging solution
Illustration: Ratna Sagar Shrestha/THT
As a developing country striving for rapid infrastructure development, Nepal’s need to boost Foreign Direct Investment (FDI) is unquestionable. The Office of Investment Board of Nepal has highlighted the need to implement eight key infrastructure projects across multiple sectors that require a cumulative investment of $19-$21 billion. A 2013 World Bank report suggests that Nepal needs annual investments worth $13-$18 billion between 2011 and 2020 to bridge the existing gaps in the infrastructure sector. The devastation caused by the 2015 earthquake has only increased the infrastructure deficit in Nepal.
However, with a total lending capacity of around Rs 2,400 billion across all banking and financial institutions, Nepal certainly doesn’t have the internal capacity and capital base to finance large-scale infrastructure projects. As a result, there is a critical need for FDI to provide impetus to infrastructure…
