Saturday, April 26, 2025

DPM Paudel stresses need for alternative development financing

Kathmandu, Apr. 25

Deputy Prime Minister and Finance Minister, Bishnu Prasad Paudel, has emphasised the need to mobilise alternative development financing to ensure long-term investment in sustainable economic growth and infrastructure projects.

Presenting the conceptual framework of the Alternative Development Finance Mobilisation Bill at the House of Representatives on Friday, Minister Paudel said that the bill aims to address the current shortage of financial resources and to mobilise funds for national priority projects by providing a legal foundation for such efforts.

He explained that the bill encompasses provisions for the identification and prioritisation of infrastructure sectors and projects, mobilisation of internal resources and foreign investments, the appropriate use of financial instruments, institutional frameworks, and mechanisms for monitoring and evaluation.

Minister Paudel further noted that the bill is essential not only for mobilising alternative financial resources but also for generating employment opportunities.

According to the concept he presented, there is growing global competition in infrastructure development, alongside increasing investment needs driven by climate change, expanding access to information technology, and rising public expectations.

Studies on Nepal’s investment needs and potential indicate that over Rs. 10 trillion will be required in the coming decade, the Ministry of Finance said in a statement. However, historical data shows that annual infrastructure investment in Nepal has been limited to only Rs. 200 to Rs. 300 billion. To bridge this gap between need and actual investment, innovative financing sources and mechanisms are necessary.

"In line with the long-term national goals set out in the 15th Development Plan, the government requires substantial investment in areas such as electricity generation, transmission and distribution, industrial and special economic zones, smart cities, urban development, tourism infrastructure, roads, irrigation, drinking water, and airport construction," read the statement by the MoF.

Upon assuming office as Finance Minister last year, Paudel had approved a procedural framework related to alternative financing.

 Published in The Rising Nepal daily on 26 April 2025.        

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