The third edition of the Nepal Investment Summit starts today. At the event, the Nepal government will present the prospects of investing in Nepal to investors and try to attract Foreign Direct Investment (FDI). Nepal acknowledges that foreign direct investment plays a major role in its economic development, given the shortage of resources within the country. The Post’s Purushottam Poudel sat down with Finance Minister Barsha Man Pun on Saturday to discuss the summit and what Nepal aims to gain from it.

Nepal hosted two investment summits before this, in 2017 and 2019. Nepal hasn’t been able to draw the investments promised in both editions of the summit. What different is Nepal doing this time to attract more investment?

We have learned from the two previous investment summits. We have also compared ourselves with our neighbouring countries in terms of attracting investments. Data suggests that while they have attracted around 30 percent of the commitments made in similar summits, Nepal has received more.

We have drawn around 35 to 40 percent of the investment pledges, which should be considered good. However, we need more than this. This time, we have learned from our previous experience as to why more investment did not come.

This time, we have invited investors or people who are researching possible investment prospects to the summit. We are presenting the success stories of people who have invested in other countries of the world or in Nepal. So that it can inspire people to invest.

The government brought an ordinance to amend the laws that were seen as obstacles to foreign investment just a few days ago. The ordinance awaits the President’s approval. Potential investors must have noticed this. What do you say?

The government has decided to amend some laws through the ordinance that we consider necessary from previous experience. The amended law has reached the President's Office for verification. By the time this interview goes to press, the ordinance may get certified. This will be strong evidence for national and international investors that Nepal is investment-friendly.

On the other hand, there is the matter of sovereign credit rating—we have already started work on this. It has not started, but it will be finished soon. Once the rating works get completed it will confirm that we are more open to foreign investment. After this, we will be able to know Nepal’s investment rating without asking anyone.

Based on this, foreigners can come to Nepal for investment. All these reasons show we are becoming more investor-friendly. On foreign investment, we are bringing a better policy than in the past. With policies on taxes and investment, we are creating an environment that will make it easier to bring in investments, and for investors to take the benefits back to their country without hassle.

There are examples of complications faced by investors to take back dividends. Axiata, the parent company of Nepal's private telecom company Ncell, faced the problem. How will investors be attracted when they cannot take profit home?

There is a legal provision for withdrawing the return on investment. We are trying to make it simple and practical by learning from the experience of other countries. No multinational company has suffered losses in Nepal. Everyone is earning profits. Ncell has raked in profit many times its investment in Nepal. Dabur Nepal and Unilever are also making profits. There are other multinational companies that are making profits by investing in Nepal.

Similarly, foreign investments in the hospitality sector have also returned profits. These profits earned by the companies are no less than what they earn elsewhere. The problem seems to be that we are not presenting our data properly. We will also use this summit as a platform for investors to share their experiences of successfully investing in Nepal.

Many investors appear to be attracted to hydropower. However, India has adopted a policy of not buying power from projects with Chinese investment. This also affects our investment climate. How will the government address this?

We have made plans for 10 years and plans for 15 years. We have also studied how much energy we need in the coming years. Our emphasis is on clean energy such as hydropower and solar. Our policy is to sell surplus energy to neighbouring countries. Our main markets are India and Bangladesh. China is also our market, to an extent. We have signed various energy-related agreements with India, Bangladesh and China.

Investments are coming into this sector from these countries. Business is also being done. Some infrastructure related to the cross-border transmission line is being built. A 400 KV high voltage transmission line has been built on the India side. Some others will be built soon. The Dhalkebar-Muzaffarpur transmission line has been built. Butwal-Sunauli is in progress. Similarly, Lamki-Bareli is also in the pipeline. A long-term agreement has been signed with India to sell 10,000 megawatts of hydropower in 10 years.

The agreement signed during Prime Minister Pushpa Kamal Dahal’s visit to India last year is in the implementation phase. An agreement has been reached to sell 40 megawatts of hydropower to Bangladesh through India. Bangladesh has asked us for more electricity. We are coordinating with Bangladesh and India at various levels on this issue.

As far as the Indian policy is concerned, we will try to consume our own electricity first. We will try to sell the surplus energy to regional markets.

Nepal’s political instability is said to be distracting foreign investors. How do you convince them?

There is no truth in this. Change of political leadership does not hinder foreign investment in Nepal. This is a normal practice in a democratic system with regular elections. Sometimes the government veers into the minority. Our mixed electoral system tends to give no single party the majority. As a result, we have a coalition government. And whether or not the government maintains policy consistency is important. We may not always have a stable government, but we have a stable policy.

We have adopted consistent policies in the fields of hydropower and cement industries for 10 to 15 years. The minister may be changed due to the change of government, but there is no change in policy. Any change in policy is meant for the convenience of investors.

When the government was led by the Congress-Maoist alliance, it was said that big investors—from India's richest man, Gautam Adani to the Tata Group—were interested in investing in Nepal. However, with the communist forces in power, they are said to be reluctant.

This is just a rumour spread by those who do not want the prosperity of Nepal. It is true that some people close to Indian businessman Gautam Adani came to Nepal, and they showed interest in investing in Nepal. According to my information, Adani has invested in Nepal's cement industry. And even now he is positive about investing in Nepal. His representatives are coming to the investment summit as well. The summit is not a matter related to the views of any party. This is Nepal's investment conference.

Just because there is a particular coalition does not mean investment will not come. Pushpa Kamal Dahal was the leader of the government when the summit was announced and he is still leading the government. Such rumours are propaganda peddled by those who want to keep investments away.

Again, as far as Gautam Adani is concerned, I am personally in touch with people who work with him at various levels. When I became a minister, I invited Adani to Nepal, and we have interacted with him frequently. He is still looking at different areas of investment. He is especially interested in airport construction and management and the energy sector.

Geopolitical factors are also believed to impact investments. Is the government prepared to ensure that geopolitics does not affect investment prospects?

There are geopolitical conflicts all over the world. In Nepal, we are not against anyone's legal investment. We have always welcomed foreign investment that comes with good intent. If geopolitics affects investment, the most intense geopolitical competition is between the US and China. But these two countries are also the world's largest trading partners. When talking about India and China, there may be competition between them, but there is also cooperation. We need legitimate investment in priority areas. We want to ensure that the investments coming into our country are not targeted against any country.

Let’s invest in Nepal.