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FDI drops by 3.3 percent in first month of current fiscal

Nepal to simplify foreign investment procedures

KATHMANDU: Nepal has received less foreign direct investment (FDI) in the first month of the current fiscal year.

The country which received Rs 1.44 billion in July/August of the previous year has received only Rs 1.39 billion in the first month of the current fiscal. This is 3.3 percent less than the corresponding period of the previous year.
The country that received FDI at a high rate in all the months of the last fiscal year has seen a decline in the current fiscal year.

Nepal Rastra Bank’s Spokesperson Gunakar Bhatta said that it was not possible to tell the reason for the decline in FDI or analyze the trend of foreign investment based on one month’s data.

He opined that though FDI had declined across the world due to the COVID-19 pandemic, which has been felt in Nepal too, FDI is unlikely to be less this fiscal than in the last fiscal year.

Bhattarai also said that foreign investment will increase in the coming months due to the improvement in the investment environment in recent years, enactment of some laws in this regard, introduction of one-window system for foreign investors, the investment conference and other reasons.

Bhatta mentioned that leaving aside the impact of the COVID-19, the investment climate in the country has improved significantly. In the last fiscal, FDI had increased by about 50 percent. More than 90 percent of foreign investment in Nepal was received for four hydropower projects in the last fiscal year.

Of this, Rs two billion was invested in Water and Energy Development Company, Rs 3.60 billion in Langtang Bhotekoshi Hydropower, Rs 8.15 billion in Arun Hydropower and Rs 1.42 billion in Solu Hydropower Company.
Based on the data till last July, the effect of COVID-19 has not been seen in foreign investment. In Nepal, the government imposed the lockdown since March 24.

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