Investment Board of Nepal and Hongshi-Shivam Cement P. Ltd. signed a Project Investment Agreement (PIA) today for the development of a mega cement factory in Nepal.
The Chief Executive Officer (CEO) of Office of the Investment Board (OIBN), Mr. Maha Prasad Adhikari on behalf of the government and the Director/General Manager of Hongshi Shivam Cement Pvt. Ltd, Mr. Lai Weipeng, on behalf of the company signed the PIA in the presence of Hon’ble Minister for Finance and Vice-chair of IBN Mr. Gyanendra Bahadur Karki and Ambassador of the Republic of China in Nepal Her Excellency Yu Hong.
PIA is a contract between the government of Nepal and the company, and it lays down the rights and obligations of both the parties. The contract provides high confidence to the company by providing protection to its investment. It also ensures the success of the project by stating the timelines for its construction.
As per the agreement, the company will make an investment of $359.18 million (App. NRs 36.75 billion) to set up a cement factory in Nawalparasi district. The company has its mine in Palpa district. The project, a joint partnership between Hong Kong Red Lion Cement No. 3 Ltd, a subsidiary unit of Hongshi Group from China and Shivam Holdings, consisting representatives from various business groups in Nepal, has planned to produce 6000 tons of cement per day. The company will start production by 2018 and it has a target to produce 12,000 tons of cement per day.
The project will provide high quality cement to the local market’s demand and also create competition for quality of cement production in Nepal. The company has employed more than 1000 people during its construction period.
Speaking on the occasion, Finance Minister Karki said the realization of the investment has sent a positive message in terms of overall business climate in Nepal. He also expressed commitment for providing necessary support on behalf of the government. “I would like to ensure that government will provide all the necessary support and facilitation required to execute the project,” he said. He also said that the government will provide necessary infrastructure facilities to the company as committed in the budget. Minister Karki also appreciated the efforts by Office of the Investment Board and necessary cooperation from all line ministries and agencies in the process of finalizing the pact.
CEO of the Investment Board Adhikari said the agreement proved that Nepal has truly become an attractive investment destination for foreign investors. “With this agreement today, we open endless doors of investment opportunity for foreign companies to confidently invest in Nepal and become a partner in its journey towards economic prosperity,” Adhikari added. He also thanked all stakeholders for the support and cooperation to facilitate the implementation of the project.
He also expressed gratitude to development partners such as JICA, World Bank, USAID and especially DFID for extending support to Investment Board to deliver the highest quality service and professionalism that significantly contribute for delivery of large-scale infrastructure projects in Nepal
On the occasion, Lai Weipeng, Director / General Manager of Hongshi Shivam Cement Private Limited thanked the Investment Board for its support to bring the project to this stage. “Role of Investment Board has been very important to materialize this agreement. Our very experience regarding investment environment in Nepal would help circulating positive messages among international investors to attract more foreign investment into Nepal,” said Lai.
Others dignitaries present on the occasion were members of the Investment Board, Honorable Members of Parliament, high-ranking government officials of various agencies, senior representatives of Development Partners among others.