INVESTING IN EMERGING NEPAL

Nepal, strategically located between the two world’s economic giants – China in the North and India in the East is a fertile land for investment given its rich natural resources, young and vibrant population and unique geo-topography. This strategic location not only offers unparalleled and preferential access to the China and India markets for bilateral trade and investments, but also provides the potential of Nepal acting as a transit hub which could facilitate increased trade in the future. 

Nepal lies at a GMT time zone of +5:45, giving European and American countries the potential to have a 24 hour work schedule which can be vital in today's world of business and connectivity. Similarly, this also provides Asian countries the opportunity to have a collaborative work schedule, further enhancing their productivity. 

The government is deepening and broadening management while opened up to trade and FDI during the liberalization movement in the 1990's. Nepal became the member of WTO in 2004, reinforcing its commitment to integration with South Asian and other regional and global economies. It has further established its interest in economic integration through its memberships in regional economic blocs such as SAARC (South Asian Association for Regional Cooperation), BIMSTEC (Bay of Bengal Initiative for Multi-Sectorial Technical and Economic Cooperation) and SAFTA (South Asian Free Trade Area). Involvement in various multi and regional forums has provided Nepal with free and preferential access to international market.

In addition, major reforms in laws and regulations have not only spurred growth of domestic private operations, but have also opened up key domestic sectors for foreign players. 

The Nepal Investment Summit 2015 is set to provide a platform for potential investors to understand the market direction and investment opportunities in Nepal and its new Foreign Investment and Technology Transfer policy. The areas of coverage including: 

• Investment Policy
• Investment Outlook & Opportunities
• Nepalese Development Master Plan
• Legal and Tax Structure
• Financing & Incentive Options

 WHY INVEST IN NEPAL?

• Nepal Government is liberal on foreign investment and allows 100% foreign ownership in most of the sectors of economy
• The investment rules and procedures of Nepal are attractive
• The tax rates are relatively low (lowest in South Asia)
• The export and import rules and procedures are open and liberal
• Low labor costs and an increasingly literate population gives global companies based in Nepal a competitive edge in the global market
• About 63 minerals have been identified in Nepal so far (2010-2011) and the Himalayas are expected to have large reserves of limestone, talc and other industrial/construction minerals

 SECTORS OVERVIEW

 ENERGY

• • The share of traditional source in total energy consumption is 84%, of which firewood alone contributes 75%. The rest is from modern sources of energy, of which consumption of petroleum accounts to 10%. A mere 2% of the total energy consumption is met by electricity
  • Only about 40% of Nepal's population has access to electricity. The electrification rate in urban areas is 90%, whereas the rate for rural areas is only 5%
  • The demand for energy within the country is growing at an annual rate of 10 percent as well as export of power to its neighboring countries, especially to India
    
    

 HYDROPOWER

• • Nepal ranks second in water resource in the world. There are more than five thousand (5,000) small and big rivers flow in Nepal and has great prospects of hydropower of around 83,000 MW of which about 650 MWs is currently being produced domestically
  • Government of Nepal has initiated various programs to facilitate private sectors investment in hydropower and has also established the Hydroelectricity Investment and Finance Company
  • Some of the Identified potential hydropower projects are
    
    

 INFRASTRUCTURE

• • Road and aviation are the major transportation modes in Nepal
  • The road density is amongst the lowest at 121km per 1000sq km of land area as compared to the road density in other South Asian countries
  • The total road network in the country consisted of 19,968km, around 31.6% are paved roads, 23.9& are gravel roads and rest of 44.5% is unpaved road
  • The government Interim Three Year Plan has prioritized expansion of rural roads with an allocation of around 33% of road sector investment
  • In 2001, the government established a Road Transport Policy and developed a 20-year road master plan. Recently, Department of Roads has completed an integrated 10-year sector-wide plan and a Priority Investment Plan (2007 – 2016) for the development and management of strategic roads, including institutional development requirements
  • The Ministry of Physical Planning and Works has identified 8 North and South road corridors for development
  • • Kechana-Ilam-Fidim-Talegunj-Olangchungola (430km)
    • Rani-Itahair-Sankhuwasabha-Hile-Kimathanka (419km)
    • Janakpur-Jitpur-Pathalaiya-Fast Track Road to Kathmandu-Dolalghat-Sandhu (292km)
    • Birgunj (ICD)-jitpur-Pathalaiya (MRM)-Kathmandu (Kolfu)-Trishuli-Dhunchhe-Syaprubesi-Rasuwagadhi (265km)
    • Sunauli-Mirmi-Phalebas-Jomsom-Korala (467km)
    • Nepalgunj-surkhet-Jumla-Simikot-Hilsa (436km)
    • Brahmdeomadi-Jogbudha-Satbanjh-Darchula Tinkerpas (425km)
  • Nepal has 54 airports in the country, out of which 34 are currently operational; including one international airport at Kathmandu and 5 domestic hub at Biratnagar, Pokhara, Bhairawa, Nepalgunj and Dhangadhi.
  • There are 18 domestic airlines operating in the country and 29 international airlines operating around 284 flights per week.
  • There are several projects planned for the development and up-gradation of airports in the country:
  • • Second International Airport is planned in Bara, Nijgadh on public-private-partnership format
    • Up-gradation of TIA – ADB planned to provide a loan of US$70mil and a grant of US$10mil for undertaking priority work, as per first phrase of TIA mater plan 2026
    • Pokhara Airport – the government plans to develop this domestic airport as regional international airport and has sought loan from Chinese Exim Bank
    • Gautam Buddha Airport – the government signed a loan of US$28mil and a grant of US$6.41mil with ADB for development of Gautam Buddha Airport under South Asian Tourism Infrastructure Development Project.