Nepal Investment Summit 2024 – Lukewarm response from investors

The third episode of Nepal Investment Summit 2024 hosted by the government concluded on a high note with the high-level political leadership making a commitment to provide utmost protection and security to private investments including foreign investments. The summit organised as the flagship event of the investment promotion has been able to position Nepal as a promising investment destination, according to Finance Minister and Coordinator of the Nepal Investment Summit 2024 Steering Committee, Barsha Man Pun.

Leaders of the major political parties addressed the summit. Prime Minister and Chairperson of the Communist Party of Nepal (Maoist Centre), Pushpa Kamal Dahal and Nepali Congress President, Sher Bahadur Deuba, addressed in the inaugural session of the summit, whereas Former Prime Minister and Chairperson of the Communist Party of Nepal (Unified Marxist Leninist), KP Sharma Oli, delivered the concluding remarks.

Inaugurating the third Nepal Investment Summit 2024, Prime Minister Dahal announced measures taken by the country to make the environment more conducive for doing business among investors.

“We are committed to carrying out continuous reforms to facilitate investors, industrialists, innovators and ease the doing business environment,” said Dahal. The government recently amended eight different laws relating to business and investment, he added.

At a separate side event, the prime minister – also the Chair of Investment Board Nepal – attended a meeting with 12 business leaders of various delegations to assure them of Nepal’s readiness to support investors interested in undertaking projects in Nepal on the first day of the event.

MoUs and agreements
The Department of Industry (DoI) approved a total of Rs 9.13 billion investment during the summit. These investments are to establish investment company with the total cost of Rs 6 billion and construct commercial building in Kathmandu for which tentative cost of Rs 3 billion is estimated. Besides, Rs 76.6 million will be invested from the UK based Eklus energy’s 200 kw electricity project jointly with 15% investment from Mohanyal Rural Municipality. On top of that Rs 62.5 million will be invested in a hotel and restaurant project.

Saakha Group (Nepal) and BOAR Group of Hotel (Hong Kong) signed an agreement to invest 100 million RMB (excluding land) in a joint hotel project in Gorusinge, Kapilvastu.

Expert Group (Australia) and Rara Holdings (Nepal) signed a memorandum of understanding to develop a resort in Murmatop, Mugu. The total investment will be Rs 1,100 million in two phases.

BLC Group (Nepal) and Yotta Data Services (India) agreed to invest Rs 3 billion in a data centre project in Nepal.

Three memoranda of understanding were signed at the summit. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) signed agreements with both the National Chamber of Commerce, Malaysia and the Federation of Malaysian Manufacturers. FNCCI also signed a collaboration agreement with China Dongguan Xing Long Lighting Products Co. Ltd.

The Nepal Association of PPP Professionals and Practitioners (NAP) signed an agreement with the World Association of PPP Professionals and Units to promote public-private partnerships in Nepal.

M.A.B.C. Investment Group Pvt. Ltd., China signed a memorandum of understanding with NextGen Management Solutions Pvt. Ltd. during the summit.
Meanwhile, China’s Xiamengolden Dragon Autobody Co. Ltd. signed an agreement with Koshi N.K. Motors Pvt. Ltd., to establish a vehicle factory in Nepal with total investment of Rs 3 billion.

The summit showcased 150 projects in various stages of preparation, including 19 that were being readied for soliciting Expressions of Interest from potential investors. Regarding the 19 solicited projects (called EoI) during Nepal Investment Summit 2024, certain time has been given to submit EoI, reportedly, 45 days for hydroelectricity and 35 days for non-hydroelectric projects. Market sounding of nine projects was conducted during the summit.

Summit was highly successful: Government
Finance Minister Pun said the Investment Summit was an important platform for the government to reach out to potential investors and for investors to provide feedback. He added it was also a platform where potential foreign investors could network and interact with Nepali officials and policymakers and their counterparts in the private sector to obtain information required for assessing Nepal’s readiness for doing business.

The inaugural session also included addresses by dignitaries including former prime minister and the leader of the main opposition party, Sher Bahadur Deuba, President of the Nepali Congress; Madame Rebeca Grynspan, Secretary General of the UN Conference of Trade and Development (UNCTAD); and Ben Mellor, Regional Director of the Foreign, Commonwealth and Development Office (FCDO).

Ambassador of India to Nepal Naveen Srivastava, Ambassador of the United States of America Dean R Thompson, and Ambassador of China Chen Song also addressed the inaugural session of the summit. The other speakers were Martin Raiser, Vice President (South Asia), World Bank; Yingming Yang, Vice President, Asian Development Bank and Rajat Mishra, Acting Vice President of Asian Infrastructure Investment Bank (AIIB).

Similarly, President of SAARC Chamber of Commerce and Industries, Md Jashim Uddin; Senior Vice President of the United States Chamber of Commerce Atul Keshap; and the leader of Delegation from Confederation of Indian Industries (CII) Supratim Dutta also addressed the session.

Heads of the private sector umbrella organisations addressed the gathering as the co-organisers of the summit. Chandra Prasad Dhakal of the Federation of Nepalese Chambers of Commerce and Industry; Rajesh Kumar Agrawal of the Confederation of Nepalese Industries and Kamalesh Kumar Agrawal of Nepal Chamber of Commerce delivered their remarks. Two other speakers of the inaugural session were Sushil Sharma, Chairman and Managing Director of Satluj Jal Vidyut Nigam (SJVN) which has been building a large hydro project in Nepal, and Sushil Bhatta, Chief Executive Officer of Investment Board Nepal.

The Nepal Investment Summit was a two-day event designed to attract investment to the country. Leaders discussed a range of topics to make Nepal an attractive destination. Three main sessions focused on investment opportunities, past investment successes, and using public-private partnerships to improve infrastructure and services. Additionally, 10 smaller sessions explored specific investment themes in more detail.

Delivering his concluding remarks in the summit, Former Prime Minister and Chairperson of CPN (UML) KP Sharma Oli stated Nepal offers lucrative returns and easy repatriation of profit along with required facilitation and protection to private investments including foreign direct investment (FDI).

A total of 2,500 participants including 800 foreign delegates; representatives of government agencies, the private sector, and Nepal’s development partners attended the summit.

Lukewarm response from investors
The Nepal Investment Summit brought together a wide range of participants, including lenders like international development organisations and investment banks, diplomats and UN agencies. The government aimed high by inviting prominent business leaders like Elon Musk and Mukesh Ambani to speak at the event, hoping to attract their investment. However, some critics pointed out the irony of focusing on these big names while failing to secure participation from a broader range of private sector investors. Former Foreign Secretary Madhu Raman Acharya questioned whether the summit achieved its goals by primarily inviting development partners and diplomatic missions, whose role is often separate from direct private investment.

The private sector’s muted response to the summit might be due to ongoing tensions with the government. Some critics point to a lack of substantial reforms and a history of government actions that discourage domestic investment. While the government did issue an ordinance aimed at streamlining investment regulations, its effectiveness is uncertain because it needs parliamentary approval within six months to remain valid.

Business leaders expressed cautious optimism after the summit. They welcomed the government’s pledge to continue reforming investment regulations, reduce bureaucratic delays and cut red tape. Additionally, the government’s approval of the Bilateral Investment Agreement (BIA) framework was a positive step. However, leaders urged the government to prioritise improvements in 10 key areas identified by the World Bank’s Doing Business report to truly create a more attractive investment climate.

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