Wednesday, September 11, 2024

Preparations begin to set up Agro Venture Capital

Kathmandu, Aug. 29

With the aim to fill the gap of venture capital in agriculture enterprises in Nepal, Nexgen Management Solutions Pvt. Ltd. is planning to launch an Agro Venture Capital. A feasibility study of the proposed company has already been completed.

"The establishment of Agro Venture Capital is being prepared with the aim of developing and expanding the industrial business based on agricultural raw materials and finished goods produced in Nepal," said the company in a statement on Thursday.

Nexgen Management has initiated preparations for setting up agro venture capital after multiple rounds of discussions and feasibility studies with former bankers, former heads of regulatory bodies, agricultural experts and agribusinesses. They include former Governor of the Nepal Rastra Bank, Dr. Chiranjibi Nepal, former secretary of the Ministry of Agriculture and Livestock Development, Yogendra Kumar Karki, former chairman of Insurance Board, Devendra Pratap Shah, and former bankers Ramesh Kumar Bhattarai and Janak Sharma.

The proposed company will be called Nepal Agro Venture Capital Ltd. will have the paid-up capital of Rs. 500 million which will be increased to Rs. 1 billion within a year from the start of its operation.

About 85 per cent of the shares of the company will be allotted to the founders and 15 per cent will be sold to the general public. Likewise, 45 per cent of the founder shares will be for bank insurance and the institutions listed at the stock exchange while 40 per cent will be allocated for individuals and private companies.

The proposed venture capital company will have a seven-member board of directors. There will be five members from the founders, one member from the general public and one independent director.

Chairman of Nexgen Management, Ramesh Kumar Bhattarai said that although foreign and domestic venture capital are operating in Nepal, there is no separate venture capital to assist in the establishment, operation and promotion of agricultural raw materials and ready-made products which creates need for a company of this nature.

The government has given an attractive and loud slogan to develop and expand the agricultural sector, but nothing has been done. That's why we want to do it through venture capital in order to make efforts from the public and private sector as well, he said.

Bhattarai believes that by taking the approval from the Securities Board and raising sector-wise funds and investing in agriculture as a priority, the business of other sectors can also be invested and expanded in the same way.

Nepal is an agricultural country, more than 65 per cent of the people depend on agriculture, the contribution of agriculture to the national economy is more than 24 per cent.

"Development of the country is not possible without the development of the agricultural sector. To increase the standard of living and purchasing power of the people, there must be development of agricultural production and agriculture-based industries. But the investment in agriculture has not been as expected," reads the statement. 

Published in The Rising Nepal daily on 30 August 2024.        


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