The government plans to dangle 148 potential projects, with nearly Rs900 billion worth of ready-to-go projects, before foreign and domestic investors at the third edition of the Nepal Investment Summit slated for April 28-29.

A top official at Investment Board Nepal said that among the projects, 21 are ready-to-go projects that have already secured a government nod. These projects are ready and the government will invite potential investors to submit the expression of interest from the spot during the two-day summit.

Most are hydropower projects, with 1,902 MW Mugu Karnali storage hydro project, whose cost has yet to be estimated, being the biggest, followed by 1,216 MW Khimti Thoshe Shivalaya storage hydro project in Dolakha, with an estimated cost of Rs231 billion. Likewise, the 150-km Chandragiri-Chitlang-Palung expressway, which connects Kathmandu with Chitwan is also on the list, estimated to cost Rs221.12 billion.

A total of 31 private sector projects will be showcased at the summit.

Board officials said they have so far confirmed the participation of 462 delegates, among the 1,355 invitations sent. Altogether 161 will be Nepali participants and the rest will come from 35 different countries.

China and India dominate the participant list, with a combined 124 participants from Nepal’s two immediate neighbours.

“More projects will be showcased at the summit, but their values have yet to be ascertained,” said Pradyumna Prasad Upadhyay, spokesperson for the Investment Board Nepal.

“The 21 ready-to-go projects are ready for investors. We will invite an expression of interest from potential investors during the summit.”

The investment board, the government’s central body to deal with large investments and fast-track projects, is optimistic about drawing investors this time after learning from limited success of the previous two summits in bringing investments.

However, critics say the government is laying down a metaphorical red carpet for investors even though little has been done to improve the country’s political situation or the investment environment, as corruption scams unfold one after another.

Nepal’s economic activity has slowed and the outlook remains overshadowed by political crisis and geopolitical tensions. The private sector has indicated that most businesses, particularly manufacturing, have declined.

“The business conditions are turning from bad to worse. Even domestic investors are cautious about investing in Nepal,” said Achyut Wagle, an analyst of Nepali politics and economy.

He said that there is no seriousness. “The government is unable to ensure policy credibility,” he said.

For instance, the government says it will amend the laws and regulations to eliminate red tape investors confront, “but changing laws and regulations overnight just to show investors that everything is on the right track is itself a mockery,” said Wagle.

The World Bank said in its recent report that frequent political changes in Nepal have been a big drag on businesses for over a decade and have dampened private investment.

Despite tall claims by the government on policy stability, there are several instances where mega projects awarded to foreign firms by one government have been cancelled and pledged to another foreign firm by the next government, apparently for political gains. Most prominent cases are the two 1,200 MW hydropower projects on West Seti, and the 1,200 MW Budhi Gandaki Hydropower Project. These two projects have been flip-flopping between India and China.

According to Upadhyay, spokesperson for Investment Board Nepal, the government is amending 12 Acts, including the Foreign Investment and Technology Act, Special Economic Zone Act, Forest Act, Industrial Enterprising Act, National Conservation and Wildlife Act, Land Reform Act, Land Acquisition Act, Environment Protection Act, Civil Aviation Act, Public Private Partnership and Investment Act, Electronic Transaction Act and two regulations related to foreign investment and technology transfer and forest regulation.

The Parliament, however, has been prorogued. The government now plans to amend the Acts through an ordinance.

“Even if the amendments are made through ordinance, there is no certainty whether the Parliament will pass it after the House sits again,” said Wagle. “There is uncertainty everywhere.”

The private sector says that “dark clouds” look set to remain anchored over Nepal’s economy for a foreseeable future.

“Though the external sector has improved, domestic activities have failed to recover,” said Rajesh Kumar Agrawal, speaking at the 21st annual general meeting of the Confederation of Nepalese Industries, on Tuesday.

“The banking system has billions of rupees piled up. This shows a lack of investment… Demand has slowed down in the market. Entrepreneurs are worried.”

He said most businesses have been closed and some are on the verge of shutting down. “The industrial production capacity has shrunk to 40 percent.”

“The double-digit economic growth, which we [the private sector] envisioned for the past two decades, is a far cry,” said Agrawal.

The World Bank said that Nepal’s economic growth will be at 3.3 percent in the fiscal year 2023-24, ending mid-July, up from last year’s 1.9 percent. Nepal has seen worse-than-expected 3 percent average growth in the past four years.

Also, the summit is taking place at a time when wars are raging in Europe and the Middle East, which will deter foreign investment.

“More polarisation among powerful economies, as they spend more on war, will also affect the foreign aid being provided to Nepal, besides hampering foreign investment,” economist Chandramani Adhikari told the Post earlier this week.

Nepal is slated to graduate from the least developed countries status by 2026 with a meagre growth rate, which analysts say is worrisome.

Thriving corruption and lack of accountability have stalled growth and forced tens of thousands of young Nepalis to try their luck abroad.

The government is convening the investment summit to welcome investors into the country even though the previous two summits did not bring much in the way of money. In both summits, the investment pledges for various projects had run into billions of dollars, but only a few commitments translated into reality.

The first edition of the summit was held in 2017, bringing together more than 250 international investors. The summit had secured letters of intent worth Rs13.74 billion, but only a few materialised. The second edition took place in March 2019.

“The investment summit has become a ritual. More than the summit, investors look for an assured rate of return in which the government is not serious,” said Wagle. “It’s been 30 years that Nepal has been asking foreigners to invest in Nepal. But they are not coming. Why should they come?”

Economist Keshav Acharya told the Post in a recent interview that political uncertainty is weighing heavily on the economy. “We are not sure whether the current government will last six months,” he said.

“This instils a sense of fear among both domestic and foreign investors.”

Government officials, however, said despite the downbeat business activity, the mega-investment conference in the next two weeks would provide a “rocket fuel” for business expansion.

“This year the summit is different because we are focused on amending laws that have been preventing investors from coming to Nepal,” said Upadhyay. “We have sureshot projects. This investment summit will provide the fuel for Nepal’s businesses to breach new frontiers in technology, finance, hydropower and other sectors.”

“The political scenario is different, but that will not impact policies. The coalition government changed, but the new coalition took ownership of the summit. This shows politics has nothing to do with the country’s policies.”