KATHMANDU: The Confederation of Nepalese Industries (CNI) is organizing the fifth edition of the “Nepal Infrastructure Summit 2024”, which kicks off today, September 12, in Kathmandu. This two-day summit comes at a critical time when Nepal’s infrastructure needs are expanding rapidly, yet the country’s capacity to meet these demands through government resources alone is dwindling.
The summit, organized in collaboration with the Nepal government, will focus on sectors such as regional transportation, energy, urban development, and overall infrastructure development. This year’s theme emphasizes the growing necessity of public-private partnerships (PPP), blended financial instruments, and commercial loans to fill the investment gap for sustainable infrastructure projects in Nepal.
The event is expected to gather over 1,200 participants, including Nobel laureate Raikone Chung, Rajiv Kumar, Chairman of India’s NITI Aayog, 35 international speakers, 70 Nepali experts, along with foreign and local investors, bankers, development economists, and policymakers. This makes it one of the most significant platforms for infrastructure discussions in the country.
Growing Infrastructure Investment Needs in Nepal
As a lower-middle-income country, Nepal is experiencing increasing pressure to invest in infrastructure. CNI highlights that investment in infrastructure is a key driver for economic development, job creation, and the welfare state. However, due to limited government revenue, rising social obligations, and weak fiscal management, the government alone cannot meet the growing infrastructure demands.
Nepal’s capacity to raise sufficient funds for large infrastructure projects has weakened over time. According to CNI, the government’s limited revenue sources are being absorbed by essential current expenses, leaving little room for investment in physical infrastructure. For instance, in the last fiscal year, the government spent NPR 952 billion on current expenses and an additional NPR 264 billion on loan repayments and interest, consuming most of the country’s revenue. Consequently, Nepal has increasingly relied on borrowing to finance development projects.
The government has acknowledged that its investment is insufficient to meet the country’s infrastructure needs. The need for infrastructure investment has increased due to Nepal’s ambition to graduate from a lower-middle-income country by 2030 and its international commitment to achieving the Sustainable Development Goals (SDGs).
Alternative Financial Management and Public-Private Partnerships
To address these challenges, the government has been exploring alternative financial management solutions. This includes raising commercial loans, attracting private sector investment, and utilizing blended financial tools to meet the growing infrastructure needs. CNI has been actively advocating for increased private sector participation in infrastructure development, stressing that the private sector is a critical partner in filling the infrastructure investment gap.
CNI has organized this summit since 2014, in partnership with the Nepal government and other stakeholders, such as the Ministry of Physical Infrastructure and Transport, the Ministry of Urban Development, and the Investment Board Nepal. The summit has become a platform for discussing how to improve the investment climate, identify opportunities for infrastructure investment, and implement international best practices in infrastructure development.
Addressing Policy Reforms and Global Practices
At the summit, discussions will focus on policy reforms required to improve Nepal’s investment climate and encourage foreign direct investment (FDI) in infrastructure. CNI President Rajesh Kumar Agrawal stated that this year’s summit aims to provide critical recommendations to the government on policy improvements to secure financing for large-scale infrastructure projects.
The “BYD Nepal Infrastructure Summit 2024” will feature in-depth discussions on 12 key areas, including regional transportation, energy, and urban development. Participants will engage in meaningful dialogue about the future infrastructure needs of Nepal, the available investment opportunities, and the challenges in securing financing.
The event’s conclusions will be shared with the Nepal government to assist in formulating strategies and policies for infrastructure development. The two-day event is expected to provide valuable insights on how Nepal can leverage both domestic and international resources to meet its infrastructure goals while fostering economic growth and job creation.