IBN will accelerate investment in transformative green infrastructure projects

KATHMANDU: The Investment Board Nepal, established in 2011, is a high-level government agency under the Chairmanship of the Prime Minister to develop, implement, and facilitate projects in Public-Private Partnership (PPP) and private investment by mobilizing domestic and foreign investment in Nepal. During the ten-year period of its establishment, the Board has played a significant role in the development of large and transformative infrastructure projects that will make a significant contribution to the socio-economic transformation of Nepal. The Board has approved an investment of about (USD 7 Billion) Rs. 833 billion for 27 projects, till date. Out of those projects, 15 projects are in energy and 12 are in the other sectors.

IBN has contributed to wider clean energy in Nepal through hydropower projects and has been exploring opportunity in solar projects, electric transport and smart urban cities. The flagship project, Arun-3 with 900 MW installed capacity is in the advanced stage of construction with almost 40 percent progress being made so far. Similarly, the 900 MW Upper Karnali HEP is at the financial closure stage. Some of our Cement Projects such as Hongshi and Huaxin have adopted waste heat recovery systems (WHRS) for power generation.

IBN as the fast-track agency and facilitator of private investments and PPP in Nepal has been able to increase investors’ confidence in bringing in more investment in Nepal for the development of green energy projects in various sectors. Signing of an MoU with the SJVN Limited to develop Lower Arun with an indicative capacity of 679 MW, Risen Energy Singapore JV Pte. Ltd. for 250 MWp solar project, and Power Construction Corporation of China for Tamor Storage HEP of 756 MW have been completed in the last fiscal year alone. These are some examples, which demonstrate that the investors are finding their comfort zone to invest in Nepal. This is also an indication of the increasing credibility of IBN.

Our project portfolio and achievements so far clearly demonstrate that we have geared toward significantly contributing to the target of achieving the net zero emission. We have started developing project bank framework along with project bank management information system, and web based one stop service which will help us provide decent services to our valued developers.

Nepal is one of the most vulnerable countries to climate change, with increased events of flash floods, glacial lake outbursts, droughts, landslides, heat/cold waves, and unpredictable rainfall in the recent years. An increase in these climate impacts would threaten Nepal’s development efforts and the lives and livelihoods, particularly of women and marginalized groups. Though Nepal’s share in carbon emission is negligible, Nepal has been adversely affected due to it. The need to invest in Nepal resilience in response to climate change impacts is 1 to 2 percent of GDP every year, which is huge.

With the declaration of the UK Government hosting COP 26 in Glasgow in November 2021, the Government of Nepal proactively aims to engage more strategically and effectively at the national and international level to raise awareness of the climate action needs and priorities of Nepal. Nepal has unprecedented opportunity to ensure its heightened international profile on climate change mitigation and adaptation process through ongoing leadership on climate action and in leveraging and mainstreaming non-traditional and low carbon financing.

Strong collaboration between our two nations is required to reviving the economies with focus on green infrastructure to limit the Greenhouse gas emission and collectively enhance the socio-economic condition of the concerned beneficiaries.

The production of green hydrogen through electrolysis could be one of the promising areas of investment in Nepal because of probable abundancy of hydroelectricity in the coming days. In the context of global climate change, when we are gearing towards net zero emissions and transitioning to a carbon neutral economy, developing low carbon and climate resilient infrastructure would be a win-win situation for both of our countries.

The ongoing discussions on energy transition between Nepal and UK’s private sector, financing in energy transition, energy trade and investing to achieve net zero emission and investment opportunities in Green Infrastructure in Nepal is very timely and crucial.

Nepal & UK with strong history of ties have been partnering on many fronts and levels. Businesses and investments are on the increasing trends and are taking on new shapes and dimensions. The presence of British investors and companies in the Nepalese economy has been increasing across many sectors including education, manufacturing, IT, and energy.

Nepal is on the path of generating economic prosperity by creating a robust legal and policy framework aimed at providing a conducive business environment for the private sector as one of the main pillars of the economic development. It gives me immense pleasure to inform you that in recent years the Government of Nepal has undertaken various reforms as part of its sustained efforts to garner private sector investment.

Our reform drive has gone well beyond various regulatory frameworks. Strengthening institutions, building capacity, streamlining, and simplifying processes and procedures have also been the hallmarks of Nepal’s reform initiatives. For instance, Nepal’s improved its doing business index from 110th position to 94thin year 2020.These efforts and reforms reiterate the commitment of the Government of Nepal to create an investment friendly environment and overcome the challenges faced by foreign investors.

IBN, as the “first reference point for investment in Nepal”, is committed to availing excellent and quality services to investors for timely execution of projects. We have a vision of developing Nepal as an attractive investment destination. To achieve this vision, we are committed to accelerating investment in transformative green infrastructure projects across a variety of sectors by promoting and managing public private partnerships and facilitating private investments.

This article has been developed based on Bhatta’s remarks on the UK-Nepal Energy Transition & Countdown to COP26 which kicked off on September 29.  Bhatta is the chief executive director of Office of the Investment Board Nepal.