46% of FDI in energy

    465

    Hydropower sector has received 46 percent of total foreign direct investment (FDI) in Nepal. Investment commitment for Rs 87.56 billion has been received in the sector out of the total FDI commitment of Rs 190 billion received by the end of ninth month in the current fiscal year ending in mid-April, according to the Department of Industry.

    “Hydropower has become the main sector for investment. It has increased as the sector is big and the prospects for return are also attractive,” Director at the Department Bipin Raj Bhandari said. Commitment of Rs 54 billion was received for five projects in the last fiscal year. “This year only two projects have been added probably due to the earthquake and Indian blockade. Investment is also low,” he added. A total of 74 projects have been established in Nepal until now and they have expressed commitment to provide jobs to 10,000.

    Foreign investors are attracted toward the sector as the government has prioritized the sector, simplified the process for acquiring license, ease bank finance and brought provision to sign power purchase agreement (PPA) in US dollar. The Investment Board, Nepal chaired by prime minister has been formed to bring in foreign investment. The government has also already signed project development agreement (PDA) with promoters of Upper Karnali and Arun III. Power trade agreement (PTA) has already been signed with India to create investment environment while the government is also providing grant of Rs 5 million for every MW, full tax waiver for 10 years and 50 percent waiver for the next five years.

    President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka said foreign investment is necessary for energy sector. He stated that everyone including commoners and entrepreneurs is affected by extreme load-shedding. “We must increase investment in hydropower sector and become self-dependent in it for transformation of the country. Political parties must come together for that through commitment and action,” he opined. He added that investment will rise significantly if the government were to create investment environment. The government has already unveiled the Concept Paper on National Energy Crisis Prevention and Electricity Development Decade to increase investment in the sector.

    Manufacturing sector follows hydropower sector in terms of FDI commitment, according to the department. A total of 968 manufacturing projects have been established in Nepal by the end of ninth month of the current fiscal year. Commitment of Rs 35 billion (19 percent) has been received for the sector. Investment has also significantly increased in tourism sector. A total of 1,167 projects have been started to invest in the tourism sector. “FDI commitment for Rs 36 billion has come through the projects,” Bhandari revealed.

    Source : Karobar Daily