Dolma Fund Management has announced the first close of Dolma Impact Fund II (Dolma II) - a private equity fund investing primarily in renewable energy, healthcare and technology in Nepal.

Investors in this $40 million first close are FMO, the Dutch entrepreneurial development bank; CDC Group, the UK's development finance institution and impact investor; Swedfund, the Swedish development finance institution; and the International Finance Corporation (IFC). The final close is targeted at $75 million, as per a media release.

The timing is important as COVID cases rise in Nepal, following the trend in India. Dolma II's target sectors will directly address capacity constraints in healthcare and enable digital solutions to scale rapidly that will be vital both during and following the pandemic.

Pre-COVID, Nepal was one of the world's fastest growing economies, achieving GDP growth rates of between 6.7 and 8.2 per cent in 2017-19, according to the World Bank, as it continues its journey towards middle income status. Even in 2020, Nepal outperformed its South Asian peers. Dolma II is part of a shift towards increased foreign direct investment (FDI) in Nepal, a country with a population of almost 30 million.

Dolma II follows the success of Dolma Impact Fund I (Dolma I) which pioneered institutional FDI and Environmental and Social standards from 2014 in this high-growth emerging market. Dolma I's portfolio includes almost 50 MW of renewable energy, some of the country's leading AI and e-commerce firms, and much-needed pharmaceutical manufacturing and medical care.

Other foreign investment successes in Nepal include an internet service provider, mobile telco and hydropower projects, while long-established multinationals such as Standard Chartered, Unilever and Coca-Cola continue to thrive in the country. To further accelerate FDI, Nepal Invests platform was launched last month by CDC, FMO and the Swiss Agency for Development and Cooperation (SDC), the release adds.

Dolma Logo, Photo: Dolma
Dolma Logo, Photo: Dolma

A version of this article appears in the print on May 12, 2021, of The Himalayan Times.