Kathmandu — Deputy Prime Minister and Finance Minister Bishnu Paudel stated that the government will create an environment to attract foreign investment in Nepal’s energy sector. Speaking at the ‘Unlocking Investment’ program organized jointly by the Independent Power Producers’ Association of Nepal (IPPAN) and Upaya in Kathmandu on Wednesday, Minister Paudel emphasized the need to make the highest use of water resources for the prosperity of Nepal. He also mentioned that more focus should be given to internal energy consumption rather than just energy production and export.
Paudel also stated that the government will adopt a policy to encourage large multinational companies to set up industries in Nepal, ensuring that the maximum production of Nepal is consumed domestically.
Minister Paudel urged energy entrepreneurs who have invested time and effort into energy production to avoid exhaustion and come forward for extensive discussions to resolve issues one by one. He emphasized that Nepal should not be content with the current level of progress in the energy sector and stressed the need to quickly reach a point where Nepal does not need to import electricity even during winter.
IPPAN President Ganesh Karki stated that Nepali banks have invested loans in large foreign-funded hydroelectric projects, resulting in a lack of investment in domestic hydroelectric projects. “There is a small limit to the investment banks make in hydroelectricity,” Karki said. “They point out that the limit for investing in domestic hydroelectric projects has been reached due to the loans invested in foreign-funded projects.
Karki mentioned that it is necessary to either exclude investments in foreign-funded projects from the limit or to arrange for Nepali banks to be unable to invest in foreign-funded projects.
During the program, President Karki highlighted several issues, including that the Electricity Bill is attempting to weaken the Nepali private sector, more than 30 ongoing hydroelectric projects have been rendered almost defunct due to prolonged delays in receiving approval for IPO issuance from the Securities Board, double taxation demands from local authorities, customs duties on certain items being charged at 28% instead of the standard 1%, and the VAT exemption of 5 million rupees per megawatt promised by the government still not being received. He drew the attention of Deputy Prime Minister and Finance Minister Vishnu Paudel to these concerns.
During the program, Babakar Faye, the Nepal Director of the International Finance Corporation (IFC), stated that IFC has adopted a policy to encourage Nepal’s private sector. He mentioned that IFC has been investing in energy projects and is prepared to increase investment in Nepal’s energy sector in the future as well.
Speaking at the event, Vidyavaridhi Sigdel, the Executive Director of Dolma Impact Fund, stated that since Nepali banks can invest only 40 to 50 billion rupees annually in energy, it would take more than 40 years to produce 10,000 megawatts from domestic investment alone. He emphasized that sustainable development of energy can be achieved through foreign investment and stressed that Nepali hydroelectric entrepreneurs should focus on environmental, social, and governance (ESG) aspects to achieve this.
Suman Rayamajhi, the Managing Director of Upaya, stated that if Upaya had not attracted foreign investment, it would not have reached its current height. He also mentioned that energy projects should move forward with a focus on ESG (environmental, social, and governance) aspects to attract foreign investment.
Source: Kantipur
