JICA, DIF II sign investment agreement

Kathmandu, Dec. 20

Japan International Cooperation Agency (JICA) has signed a US$ 10 million investment agreement with Dolma Impact Fund II (DIF II), a Private Equity (PE) fund managed by Dolma Fund Management (DFM).

JICA's investment will be mainly utilised for equity investment in healthcare companies, IT/digital companies, and renewable energy projects in Nepal, it informed at a programme organised in the Capital on Tuesday.

JICA is co-investing alongside Development Financial Institutions (DFIs) such as the FMO, the Dutch entrepreneurial development bank; British International Investment, the UK’s development finance institution and impact investor; Swedfund, the Swedish development finance institution; the International Finance Corporation (IFC); and the United States International Development Finance Corporation (DFC). JICA’s investment is part of the final close of DIF II, which brings the fund corpus to US$ 71.96 million.

Nepal is facing the challenge of a hollowing out of industry caused by the increased number of migrant workers due to the lack of promising domestic industries and job opportunities in Nepal, read the assessment of JICA.

"Therefore, the fostering of promising industries such as healthcare and the IT/digital sector is urgently needed in Nepal. Likewise, with around 42,000 MW hydro energy potential, the country is expected to expand its renewable generation capacity to contribute to the reduction of greenhouse gas emissions in South Asia," it said.

DFM manages impact investment funds that promote industrial development, employment creation, and renewable energy development. They do so by investing in healthcare companies, IT/Digital companies, and renewable energy projects, mainly in Nepal, as well as by offering technical assistance to investee companies.

DFM will mobilise 108.5 million dollars under DIF I and II. It has expressed its investment commitment in four renewable energy project, three health service companies and six information technology/digital service companies.

JICA said that it has been supporting Nepal’s industrial development, renewable energy promotion, and investment-climate improvement through several technical and financial projects so far. This is the first private sector investment of JICA in Nepal. 

 Published in The Rising Nepal daily on 21 December 2022.