KATHMANDU: Deputy Prime Minister and Finance Minister Bishnu Paudel has emphasized the government’s commitment to creating a conducive environment for attracting foreign investment in Nepal’s energy sector. He stressed the importance of maximizing the utilization of the country’s water resources to achieve prosperity.
Speaking at the ‘Unlocking Investment’ event organized jointly by the Independent Power Producers’ Association, Nepal (IPPAN) and UPAAY on Wednesday in Kathmandu, Finance Minister Paudel highlighted the need to prioritize domestic consumption of energy over production and export.
Minister Paudel mentioned that the government will adopt policies to encourage large multinational companies to establish industries in Nepal, thereby ensuring that the country’s maximum energy production is consumed domestically. He expressed confidence that this approach would help create a favorable environment for the utilization of energy resources within the country.
Urging energy entrepreneurs not to be disheartened by the challenges they face, Minister Paudel called on them to participate in comprehensive discussions to find solutions to these issues. He emphasized the need to further strengthen the progress made in Nepal’s energy sector and ensure that the country reaches a point where electricity imports are unnecessary during the winter months.
IPPAN President Ganesh Karki pointed out that domestic hydropower projects are struggling to secure investments because Nepali banks have allocated significant loans to large foreign investment-backed power projects. He highlighted the need to either exclude such investments from the limits set by banks or implement regulations that prevent Nepali banks from investing in foreign-backed projects.
During the event, Babacar Faye, IFC’s Nepal Director, stated that IFC is committed to encouraging Nepal’s private sector. He mentioned that IFC has been investing in energy projects and is ready to increase its investment in Nepal’s energy sector in the coming days.
Bidya Bridhi Sigdel, Executive Director of Dolma Impact Fund, noted that Nepali banks can only invest around Rs 40 to 50 billion annually in the energy sector, which means it would take over 40 years to produce 10,000 MW of energy using domestic investment alone. He emphasized the importance of sustainable development in energy by attracting foreign investment.
Suman Rayamajhi, Executive Director of UPAAY, noted that the company would not have reached its current height without foreign investment. He urged energy projects to focus on environmental, social, and governance (ESG) factors to attract foreign investment.