No significant progress in realising FDI commitments

The Nepal Investment Summit may not bring the desired outcomes in the absence of bankable projects and political stability.

Nepal has failed to offer investment projects as per the choice and taste of the foreign investors, who expressed interest in bringing foreign direct investment (FDIs) at the Nepal Investment Summit 2017 held in March this year.

As a result, there has been no progress in realising the investment interest articulated by the investors from more than six countries.

The focal agency, Investment Board of Nepal (IBN), has only eight mega projects, although it had said in February that more bankable projects would be offered to the foreign investors.

An IBN source said that although correspondence was sent to many investors who attended the summit and expressed commitment, most of them are ‘not so excited’ to come to invest here as the government couldn’t offer attractive projects, especially in hydropower and infrastructure sector.

The IBN is a single-window body established to facilitate large-scale investment in infrastructure and other industrial enterprises in the country.

Chief Executive Officer of the IBN Maha Prasad Adhikari, however, claimed that there had been significant progress in project documentation, but it would take some months to complete them.

“I have observed that many foreign investors are in a ‘wait and see’ position though we have achieved much progress in improving the investment climate and policy reforms. Even a single incident years ago is enough to scare away investors,” he said.

He said that most of the investors were discouraged by the prolonged political instability in the country.

The country has witnessed the appointment of two prime ministers after the summit was held in March and is about to have another in a couple of months.

Investors from six countries – China, Bangladesh, Japan, the United Kingdom, Sri Lanka and India – had expressed their intent to pump in Foreign Direct Investment (FDI) of about US$ 14 billion, which was higher than the government’s expectation.

The government had hoped to bring in FDI worth Rs. 100 billion.

The investors had expressed interest in hydroelectricity, airport, highway, mining, food, tourism, manufacturing, solar energy, steel plant and construction sectors.

IBN spokesperson Uttam Bhakta Wagle said that two significant projects had come in after the investment summit – the Rs. 36-billion Hongshi Shivam Cement and 900-megawatt Arun III Hydroelectricity Project.

“We need to take the success of these two mega projects for publicity in the international market besides our traditionally attractive sectors such as tourism, hydroelectricity and infrastructure,” he said.

But these two projects were not included in the summit.

Spokesperson at the Ministry of Industry Pradip Kumar Koirala said that the ministry was concerned about the issue and claimed that the government was making efforts to draw FDI.

According to Adhikari, the investors had made an informed decision while expressing their investment intent in various industrial and business sectors. Therefore, the board will put every effort to realise the commitments.