IFC offers to invest $100m in tourism
- Post Report, Kathmandu
The strategy envisages a fivefold increase in foreign tourist arrivals to 2.52 million annually
International Finance Corporation (IFC), the private sector lending arm of the World Bank, has offered to invest up to $100 million in Nepal’s tourism sector to spur job creation by bringing the private sector and the government onboard. Tourism Ministry officials said that it could be the largest solid investment offer by an international financing institution in the tourism sector. The investment offer is part of National Tourism Strategy 2016-25 launched by the government last year,they said. The strategy envisages a fivefold increase in foreign tourist arrivals to 2.52 million annually by the year 2025. The strategy has projected an increase in jobs in the tourism industry to 898,000 from 633,000 in 2015. The strategy has envisaged increasing foreign exchange earnings from the tourism sector to Rs340 billion annually from Rs49.78 billion in 2015. The Tourism Ministry said that under destinations promotion, which is part of the national tourism strategy, IFC had studied three locations—Arun Valley to Koshi Tappu in the Eastern Region, Rarato Bardia in the Midwestern Region and greater Pokhara in the Western Region—as potential areas for investment.
“We have forwarded IFC’s investment concept paper to the Finance Ministry for its feedback,” said Tourism Joint Secretary Dandu Raj Ghimire. “IFC has also been holding talks with the Finance Ministry separately.”“As per the investment concept, IFC will study areas where hotels, resorts or other kinds of facilities can be developed,” he said. “The government’s responsibility is policy intervention and facilitating the development of larger infrastructure like roads and electricity.” Ghimire said the project aimed to catalyze private investment in the tourism industry to create jobs. Tourism Ministry officials said that IFC had shown interest in encouraging the private sector to develop luxury resorts and hotels around Rara Lake in Mugu district. Rara has seen an increased flow of domestic and foreign tourists in recent years, but the area lacks proper accommodation facilities. Ghimire said that Rara could be a key investment opportunity. Similarly, the IFC study has focused on developing buffer zones as key tourism hubs.
In 2008, IFC had helped Buddha Air to expand capacity. It provided the carrier a $10 million long-term loan to help finance the expansion. In 2015, IFC lent $3 million to Nepal Hospitality and Hotel Limited to build the Fairfield Kathmandu Hotel. The 3-star hotel will be operated by international chain Marriott under its Fairfield brand. Nepal’s travel and tourism sector pumped Rs177 billion into the economy and supported more than 427,000 jobs last year, the World Travel and Tourism Council (WTTC) said. The report said that the direct contribution of travel and tourism to the GDP in 2016 was Rs85.2 billion, or 3.6 percent.