The government said Friday that it had prioritised foreign direct investment (FDI) as the country is in need of a huge amount of funds to implement the federal system and achieve development goals. The budget for this fiscal year has not allocated funding for 12 percent of the proposed expenses.

Speaking at a conference on Blended Finance jointly organised by Investment Board Nepal, Confederation of Nepalese Industries (CNI) and Standard Chartered Bank, Finance Minister Yubaraj Khatiwada said,

“As the government does not have adequate money to implement programmes mentioned in the annual budget, FDI is essential.”

The government has planned to upgrade Nepal to a middle income country by 2022. In addition, a large amount of funds is needed to meet the targets set by the Sustainable Development Goals, the primary objective of which is to end poverty and hunger by 2030. The programme covers a set of 17 goals and 169 targets covering a broad range of sustainable development issues.

Khatiwada said the government had started amending the related laws to facilitate the inflow of FDI mainly in the construction of infrastructure.

“The government is committed to maintaining an investment friendly environment and guarantee security to investors.”

Khatiwada said the government would be marking the coming fiscal year as Infrastructure Development Year to facilitate the construction of essential infrastructure. “Investment from the private sector is equally important for the purpose,” Khatiwada added.

Maha Prasad Adhikari, chief executive officer of Insurance Board Nepal, also pointed to the need for investment from all sectors. “The government itself is also planning to invest in major projects,” Adhikari added.

CNI President Hari Bhakta Sharma said the government should come up with clear policies to lure large investors and mobilise foreign grants and loans and technical assistance.

According to him, the conference was organised to outline a clear demarcation of the mechanism of investment and the government’s role.

Sharma said a large amount of investment was needed mainly in mega projects related to energy and infrastructure development. “For the purpose, the government needs to guarantee a reasonable rate of return on investments from the private sector,” Sharma said.