Banks invest Rs 23 b in energy

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    KATHMANDU, April 13

    bank-03Banks and financial institutions have invested Rs 22.98 billion in hydropower, gas and water in the first seven months of the current fiscal year. It is 24.19 percent more than Rs 18.50 invested in the corresponding period last year.

    Investment in these sectors has increased due to the mandatory provision of Nepal Rastra Bank (NRB) requiring banks and financial institutions to invest at least 12 percent in energy and agriculture. Most of them are investing through consortium in the hydropower sector that requires big investment. The commercial banks must have paid-up capital of Rs 2 billion as required by NRB but constructing a project of 1 MW costs over Rs 130 million.

    Chief Executive Officer (CEO) of NMB Bank Upendra Poudyal claimed that the banks have been investing in the hydropower sector even in the past. “Others have been attracted to the sector also because projects operated with investment of banks and financial institutions have become successful. The provision requiring 12 percent of investment in hydropower and agriculture has also contributed to that,” he explained. He added that investment in the sector could not rise in the past also due to political instability. “The entrepreneurs did not come to banks in lack of investment friendly environment. They have now started to come to banks due to improvement in political environment,” he reasoned. CEO of Sanima Bank Bhuwan Dahal also credited the NRB provision for rise in investment in the sector. “The banks had been promising to invest in the sector even in the past. They have been attracted to the sector as energy is basic requirement,” he opined.

    Commercial banks alone have invested Rs 20.09 billion in hydropower sector in the first seven months of the current fiscal year. It was Rs 16.54 billion in the corresponding period last year. Development banks have invested Rs 2.67 billion. It was Rs 1.65 billion in the corresponding period last year. The finance companies that had invested Rs 302.70 million in the corresponding period last year, however, invested only Rs 214.10 million in the sector this year.

    Source : Karobar Daily