The Nepal Investment Summit 2019 ended on Saturday on a high note, particularly for the private sector, as the closing ceremony witnessed the signing of 15 deals and memorandums of understanding between Nepali and foreign companies.

Pitched as a flagship event of the KP Sharma Oli administration, the summit saw foreign investors’ renewed interest to put money in Nepal as the government made an all-out effort to woo them with six ministers actively participating in the plenary sessions.

“The government will further deepen policy reforms, bring more potential and investable projects and set up robust follow-up mechanism,” said Maha Prasad Adhikari, chief executive officer of the Investment Board Nepal, while delivering the closing address. “The government will guarantee world class treatment, facilitation and services to investors.”

The board was the main organiser of the two-day event on behalf of the government of Nepal. More than 1,300 participants, including over 700 foreign delegates from 40 countries representing more than 300 companies, took part in the summit.     

The deals signed on Saturday were mainly business-to-business (B2B) in nature—majority of them joint venture agreements between Nepali and foreign companies.

Chaudhary Group led the pack with as many as four joint-venture agreements in solar power, logistics park, and mobile network service. The group has entered into a joint venture agreement with Sharaf Group to develop a multi-model logistics park and 600MW solar photovoltaic project with the US-based Sky Power. Of this 600MW deal,  200MW solar power project will be established in Province 2.

In its bid to make a foray into the telecom sector, CG LifeCell also announced a joint venture agreement with Istanbul-based Turkcell for 5G mobile network service.

“Both, solar power project and logistics park project are 50:50 joint ventures. Sky Power will invest Rs25 billion in the solar project while Sharaf Group will bring around Rs6-7 billion in the logistic park,” said Nirvana Chaudhary of Chaudhary Group. “The telecom project is fully CG’s investment of Rs25 billion with Turkcell providing strategic and technical support,” he said.

Though Arun-III Hydropower Project is not a new project, the Nepali and Indian financial institutions announced Rs78.59 billion financial commitments. The 900MW project which is currently under construction received additional financial commitments of Rs65.60 billion from State Bank of India and Rs8.12 billion and Rs4.87 billion from Nepal’s Everest Bank and Nabil Bank respectively.

SJVN Limited, a joint venture of the Indian central government and state government of Himachal Pradesh, is developing the project.

The summit also brought good news for the Upper Trishuli-1 hydroelectricity project, drawing investment confirmation of $650 million for the 216MW project. The  breakthrough happened after Nepal Electricity Authority board approved the hedging solution for the Korean joint venture project. Its developer Nepal Water and Electricity Development Company had earlier threatened to pull out from Nepal after the government asked it to contribute a hefty sum to a hedge fund to be used as a cushion against exchange rate risks.

The World Bank Group's International Finance Corporation and Multilateral Investment Guarantee Agency had decided to finalise the investment in the project. The IFC is the lead lender and arranger of consortium of international lenders, including Asian Infrastructure Investment Bank.

Announcing the investment confirmation, Hak Bin Kim, executive vice-president of KOEN, the South Korean investor in the Upper Trishuli-1, said the project construction will start from October.

Similarly, a Joint Development Agreement was signed between China’s Yunnan Xinhua Water Conservancy and Hydropower Investment Co Ltd and Nepal’s Hydro Solution for the 164MW Kali Gandaki Gorge Project. The project is estimated to cost Rs40 billion with the Chinese company investing 85 percent of the project cost, according to Hydro Solution. “Construction of the project will begin in 2020,” said Hydro Solution Chairman Gyanendra Lal Pradhan.  

Pradhan’s another company Resources Himalaya Boutique Village Resort also signed a deal with Sincere Consulting Limited for the establishment of Himalaya Boutique Cosy Resort. The estimated cost of the project is Rs6 billion of  which 80 percent will be foreign investment, according to Pradhan.

While Bhairahawa-based Special Economic Zone is yet come into operation, the Investment Board of Nepal, IFC and SEZ Authority have signed a memorandum of understanding for developing another SEZ in Simara under the public-private partnership model.

Non Resident Nepalese Association signed an MoU with the Department of Industry for the establishment of NRN Infrastructure Investment Fund.

A joint venture agreement for establishing a warehouse between National Collateral Management Company and Nepal Warehouse Company, a MoU was signed between the Federation of Contractors’ Association of Nepal and Myanmar Licensed Contractors’ Association of Myanmar for mutual cooperation. An MoU was also signed between Api Power and Kandel Group of Companies, the UK for 18MW solar, 98 MW hydro and  10MW wind power.

India’s Muthoot Finance has agreed to invest Rs399 million in United Finance Company. An MoU between IBN and Investment Board of South Africa was another major deal.

There, however, was lukewarm response to the projects showcased by the government. Of the 77 projects that the government had dangled before the foreign and domestic companies, there have been 17 applications for only 10 projects.

The IBN, however, said those who have shown interest appear to be serious investors. “They have already deposited the fee determined by the IBN although we had given them deadline until April 21, hence applications are likely to go through and turn into actual investment,” said IBN Chief Executive Officer Maha Prasad Adhikari.

“We will take the deals signed forward to ensure their early implementation. We will also immediately start the processing of the applications of the projects showcased during the summit,” he said.

According to the IBN, of the 17 applications, seven are for transport infrastructure, four for energy projects, three for agriculture infrastructure, two for education and health and one is for logistics (bulk terminal).

He said that the IBN would now take the signed deals to implementation phase while starting processing the applications. “The government will guarantee world class treatment, world class facilitation and facilities to implement them.

Nepali authorities described the event as a huge success in terms of participation and business-to-government and business-to-business meetings that took place over two days.

“The Prime minister and myself held more than 30 bilateral meetings on the sidelines with the investors and delegates from different agencies. These meetings were extremely useful to carry forward our investment agenda,” said Finance Minister Yubaraj Khatiwada.

“With your interest, commitment and offer of business, I am sure that we can make Nepal a new destination for investment,” said Khatiwada while addressing the closing ceremony on Saturday. “We are overwhelmingly encouraged from the response of our esteemed participants for considering Nepal a ‘Rising Star in South Asia.”

17 applications for 10 projects

Kathmandu Ring Road Bus Rapid Transit Project                              

Tamor Storage Project                                                                              

Dhulikhel Medicity                                                                                    

West Seti Hydropower Project                                                                

Nijgarh International Airport                                                                  

International Convention Centre, Bhaktapur                                      

Integrated Agriculture Infrastructure Project Banepa & Chitwan   

Integrated Agriculture Infrastructure Project Hemja                        

Integrated Agriculture Infrastructure Project Urlabari