KATHMANDU, JANUARY 8

The government is drafting a policy, which requires preparing the Environmental Impact Assessment (EIA) only for projects with investment above Rs two billion.

Following amendment of the Environment Protection Act, the Ministry of Forest and Environment (MoFE) is amending the Environment Protection Guideline by raising the minimum investment threshold which requires EIA. Currently, the law requires mandatory EIA for projects with investment of above Rs 250 million.

The MoFE is raising the minimum threshold of investment that requires EIA following recommendations from the Ministry of Industry, Commerce and Supplies (MoICS) and other ministries.

The private sector had been urging government to raise minimum threshold of investment since long citing that EIA requirement for low investment projects has been discouraging small investors.

Following this, the MoICS had officially urged MoFE to raise the minimum threshold to Rs two billion.

Though MoFE officials said that investment threshold for EIA was the major issue to be addressed in the amendment of the Environment Protection Guideline and is likely to be raised to Rs two billion, projects with investment below this threshold will have to prepare the Initial Environment Examination (IEE) report.

“As different ministries have been requesting that the minimum threshold of investment that requires EIA be raised, we are mulling over the issue. However, even projects with small sized investments will be required to prepare and submit the IEE report,” informed Bishwa Nath Oli, secretary at MoFE.

Investors had been demanding that the investment threshold be raised citing that establishing even a small industry today requires Rs one billion and they were unwilling to inject investment as they need to go through EIA process, which is full of hassles.

“The EIA requirement for comparatively small-sized industries had been discouraging investors as the EIA process involves much hassle. As setting up a single machinery equipment required to establish an industry costs millions of rupee, we have long been asking the government to raise the minimum investment threshold that requires EIA,” said Pashupati Murarka, former president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI).

“The government’s plan to raise the threshold to Rs two billion is highly encouraging and will promote investment in the country.”