Unsolicited Proposal: The screening committee of IBN prepares the screening report of such proposals which is then submitted to the board of IBN chaired by Honorable Prime Minister of Nepal. The board afterwards decides either for its approval or disapproval related to feasibility study. If the board approves then the IBN negotiates with the developer for MOU. For example; for energy projects such MoU is signed prior to issuance of survey I.e. after approval of feasibility study by board, MoU is signed followed by issuance of survey license. Solicited Proposal: The evaluation committee of IBN prepares the report of such proposals which is then submitted to the board of IBN. It is to be noted that depending up on the criteria set by evaluation committee and also approved by board, the number of developer that fits the criteria is selected and the report is then submitted to board for decision to seek request for proposal (RFP) from those developers. However, if there is single application for a project and the developer also fits the criteria then the board of IBN approves for the feasibility study which is followed by signing of MoU and afterwards survey license is issued if needed.
IBN signs Project Development Agreement (PDA) for Public-Private Partnership Projects and Project Investment Agreement (PIA) for private investment projects.
IBN comprises up of various mechanism to monitor and facilitate the projects namely, Project Monitoring Unit (PMU), Technical Compliance Team and Project Management Team.
The project development and management team of IBN conceptualize the probable projects related to energy, Industry, Tourism, Transport, Agriculture, Urban Development, ICT, etc. The concept if approved by board of IBN is proceeded for the pre-feasibility study and the team afterwards executes the study for listing those studied projects in a project bank.
For IBN facilitated projects, Stakeholder Engagement and Policy Advocacy Unit coordinates and engages with diverse stakeholders at local, provincial and federal level.
As per sub-section 2 of section 17 of PPPI Act, 2019, any project relating to infrastructure may be carried out through the PPP with the following methods;
Nepal has prioritized hydropower sector given its richness in water resources and due to promising Global Horizontal Irradiation (kWh/m2/day), prospect lies for solar energy generation too. In addition to these, wind energy and biomass are other two sector which can be tapped for energy generation.
The energy produced in Nepal can be either sold to domestic market via Nepal Electricity Authority (NEA) or sold to neighboring countries through cross border transmission lines.
The agencies responsible for infrastructure development depends on nature of infrastructure. Few agencies responsible for industrial infrastructure are: Special Economic Zone Authority (SEZA), Industrial District Management Limited (IDML), Department of Industry (DoI), Ministry of Industry, Commerce and Supplies (MoICS), Department of Urban Development and Building Construction (DUDBC)
Transport infrastructure has formed the backbone of Nepal’s development strategy. The National Planning Commission has identified 21 “national pride projects” of which 10 are directly related to transport infrastructure, three aviation-related, one railway-related, one fast-track related and the remaining ones are about building highways. Nepal’s transport infrastructure had mainly focused on roads and aviation until very recently. At the regional level, the Asian Highway routes link Nepal with China and India via two highways: 1027 kilometers long AH2 (Kakarvitta - Mahendranagar) and 297 kilometers long AH42 (Raxaul – Narayanghat – Kathmandu – Kodari). Nepal’s road network comprises of Strategic Road Network (SRN) that is made up of national highway and feeder roads with total length of 13447 kilometers as of FY 2017/18. In addition, total length of other local road network was 60,163 kilometers as of FY 2018/19. Construction of roads along the North-South corridors, a mid-hill highway, a postal highway, the Madan Bhandari highway, and the Kathmandu-Terai fast track are some exciting plans of the Government. In aviation, Nepal has an international airport in Kathmandu, four regional domestic airports, and 28 other domestic airports in operation. Two regional international airports, Gautam Buddha in Lumbini and one in Pokhara are now nearing completion, while preparatory works are underway to develop the Nijgadh International Airport in Bara District.
According to section 44 of PPPI Act, 2019, in case any developer completes the construction of the development project before the time specified in the agreement or completes the project in less costs than the estimated costs of the project or the quality of the project is higher or Government of Nepal may get more benefits with the use of modern technology, the Board may provide more financial or non-financial incentives to such developer.
Nepal has embarked on a plan to construct a 945-kilometers long East-West Electrified Railway with rail links with India. There has also been talk about the development of Kathmandu–Kerung, Birgunj–Kathmandu, and Kathmandu-Pokhara-Lumbini railway routes for interstate transportation, and metro and monorails in Kathmandu Valley for intra city transport. Further, Nepal also has plans to develop water transport on the Koshi, Gandaki and Karnali rivers. With the success of ropeways such as Manakamana, Chandragiri and Kalinchowk Cable Cars, feasibility studies of ropeways in other areas such as Muktinath and Swargadwari are also being undertaken. If properly planned, Nepal can become a transit route connecting India and China and developing a proper transportation network will be important to make this possible.
Nepal offers a unique comparative advantage for profitable investment in diverse areas of tourism, namely, adventure, cultural, religious, and MICE (meetings, international conferences and events). Nepal has seen consistent growth rates in the incoming tourists due to booming outbound market of emerging and neighboring economies. There lies tremendous potential to cater high end tourists and promote organized mass tourism. In addition, Nepal is celebrating VISIT NEPAL YEAR 2020 to attract 2 million tourist by the year and promote large scale tourism activities in future as well. Private sector has huge opportunity to fill in the infrastructure gap essential for tourism development.
Altogether 63 mineral commodities are available in Nepal which includes 21 commodities of the metallic mineral group (Antimony, Arsenic, Cobalt, Copper, Gold, Iron, Silver, Tin, Titanium, Zinc, etc.) 23 commodities of chemical, fertilizer, insulator, ceramic, refractory and abrasive mineral group (Calcite, Clay minerals, Corundum, Dolomite, Graphite, Magnesite, Silica Sand, etc.) 6 commodities of the gem mineral group (Aquamarine, Beryl, Kyanite, Quartz, Ruby and Sapphire, Tourmaline) 10 commodities of construction materials group (Granite, Gpysum, Limestone, Marble, Slate, etc.) and 4 commodities of fuel mineral (Coal, Natural Methane Gas, Petroleum and Natural Gas) and geothermal spring group.
Nepal’s manufacturing sector is rich in potential, both for large-scale projects and innovative small-scale projects. The government is enhancing manufacturing base prioritizing industrial sector through promotion of domestic and foreign investment. Industrial Districts and Special Economic Zones have been created to ensure a competitive and investment friendly environment and to simplify administrative procedures. Some main areas of investment are: FMCGs, garments, cement, pharmaceuticals, and metal and metal products. Nepal has potential to tap regional market with high population concentration in major cities.
Nepal’s ICT sector is one of the fastest emerging sector in the country and has been prioritized for foreign direct investment. The Government of Nepal (GoN) has given special emphasis to Information Technology (IT) and Business Process Outsourcing (BPO) due to its high export potential. Owing to its large, young, skilled and low wage English speaking labor force, Nepal has a huge potential for BPO. Each year, approximately 5500 Nepalese graduates enter into the IT sector. In addition, the continual improvement in telecommunications and internet infrastructures acts a sector catalyst for investment in ICT. For the development and promotion of Information Technology and Services in the country, an IT park has been established in two different places covering an area of 257 ropani land which can accommodate 150 computer engineers to work within the periphery.
The Government of Nepal (GoN) has prioritized private sector investment in health infrastructure particularly tertiary hospital and pharmaceutical manufacturing. Nepal has specifically identified the collaboration need between public and private sector for delivery of health services to outperform on its health indicator. Nepal has a relatively large population of 29 million but significant proportion of medicine and health care supply is met by way of imports. There are untapped opportunities for large scale pharmaceutical manufacturers to fill the supply gaps by introducing new technologies and taking the pharmaceutical industry to a higher level. In addition to this, Government of Nepal has also emphasized on promotion of Ayurvedic health care through various herbs and minerals which Nepal abundantly possess. This sector awaits large scale investment for commercialization of Ayurvedic medicines which can promote Nepal as a hub for tradition medical care system of South Asia.
The largest available renewable energy resource in Nepal is hydropower, which has a theoretical potential of approximately 83,000 MW. While economically viable hydropower capacity stands at 42,000 MW, the current installed capacity is only approximately 1182 MW. In FY 2018/19, NEA’s hydropower plants, including small ones generated a total of 2,548.11 GWh of electricity, and the total power purchased from Independent Power Producers (IPPs) within Nepal was 2,190.05 GWh. In addition to hydropower, Nepal also possesses other renewable resources with significant potential, including solar, wind and biomass. In the case of Solar PV systems, Global Horizontal Irradiation (GHI) (kWh/m2/day) is used as a reference value for comparing geographical conditions. The highest GHI up to 5.5 kWh/m2/day or higher has been identified in the northwest of the country while the average daily GHI values are between 4.4 kWh/m2 and 4.9 kWh/m2 in southern parts of the country. In addition to this, on average Nepal receives more than 300 sunny days per year, much higher as compared to most of the European Countries. According to Global Wind Atlas, Nepal has a mean power density of 608 W/m2 at the height of 50m with average wind speed of 8.94 m/s for the 10% windiest area in the selected regions.
In Nepal, investment opportunities lie in the areas of technical and vocational education, education city, and research center. The Government of Nepal is increasingly focused on improving labor productivity and developing skilled labor-force that can meet industry needs, both at home and abroad. The Fifteenth Five Year Periodic Plan also states full and optimum utilization of human resource capital, which opens up an endeavor to invest in education quint-essential for production of skilled and vibrant labor force.
The constitution of Nepal 2015 created 7 provinces, 77 districts with 6 metropolitan and 11 sub-metropolitan cities, 276 urban and 460 rural municipalities. At present, 58% of the Nepal’s population lives in urban area which was only 17% as per census 2011. The major causes of rapid urbanization are reclassification and migration from rural to urban areas which resulted in urban infrastructure deficit. The key shortcoming of Nepal’s urbanization effort is that the agenda is being implemented through disjointed projects/ activities with inadequate planning or no planning for whole urban area. The ‘Master Plan’ approach generally excludes peri- urban areas and focus only on core area of the city and has little linkages to any financial and operating strategy. And in many cases, Master Plan is used as a regulatory tool instead of being a blueprint for development of planned city.
Urban infrastructures include various sectors like health, education, water supply and sanitation, ICT, urban transportation, urban housing etc.
The Banking and Financial Institutions (BFI) sector in Nepal has played a key role in increasing the growth of Nepal’s services sector. As of April 2018, there have been 28 Commercial Banks, 33 Development Banks, and 25 Finance Companies. Recently, Nepal Infrastructure Bank (NFI) has also been established to finance large scale infrastructure development project. Nepal possess tremendous investment opportunity in Banking and Finance and have been playing crucial role for increased access to finance and enhance digital economy.
Agriculture is the mainstay of Nepal's economy and comprises 27.59 % of nation's GDP (2017/2018). Nepal's unique Altitude variation (from 59 meters to 8848 meters) provides diverse climate and topography for cultivation of wide range of agro products. Nepal's Agriculture Development Strategy (2015 – 2035) addresses improved investment climate for agricultural commercialization. OIBN supports to promote and manage public-private partnerships (PPP) and Private Investment for domestic and foreign investments.
Some of the Key potential areas for investment within the Agriculture Sector are:
As per sub-section 1 of section 43 under public Private Partnership and Investment Act 2019, Government of Nepal shall establish a Viability Gap Fund for construction, operation and expansion of the projects that yield positive returns in the long run and are important from infrastructure structure but could not yield reasonable financial returns immediately.
