KATHMANDU: The country needs to massively ramp up investment in infrastructure to fill the infrastructure gap of the country so that it is able to meet the minimum threshold required for developing nations.

Even if it does not, Nepal is set to achieve its target of graduating to the league of developing nations by 2022, as it has already met two of the three criteria — namely, Economic Vulnerability Index (EVI) and Human Asset Index (HAI).

The sole sticking point now is that Nepal needs to invest 12 per cent of its gross domestic product (GDP) annually until 2020 to fill the infrastructure gap. As per the World Bank’s estimate of 2010, country needs to invest 12 per cent of the GDP to develop its infrastructure — something that the country has never achieved till date.

The country had hardly allocated five per cent of its GDP for infrastructure development from 1975 to 2009, according to Swarnim Wagle, member

at the National Planning Commission (NPC) — the apex planning body of the government.

“After the private sector joined hands with the government for infrastructure development, the contribution of the private sector in infrastructure investment amounted to 0.7 per cent of GDP between 2007 to 2012.”

As per the World Bank’s estimate, the country needs to invest $13 billion to $18 billion to bridge the gaps witnessed in infrastructure sector of the country. The country is in dire need to develop major infrastructure like, energy, road connectivity and other transport infrastructure, irrigation, water supply, information and technology, among others.

Wagle said that NPC is gearing up to pool in resources in next fiscal’s budget to address the infrastructure gaps. “At least 75 per cent of the total infrastructure financing should go towards energy and transport,” he asserted, adding, “For this, we can attract as well as encourage the private sector to invest in infrastructure, which in turn will also help develop other sectors.”

The potential for infrastructure development, especially in hydropower sector, is evidenced by the fact that the country reportedly can generate 83,000 megawatts of electricity. Of this, it has been able to tap only 800 megawatts through the existing hydropower projects in the past 100 years, when the country started to generate electricity.

Nepal is ranked in the 126th position in the world regarding overall infrastructure development, going by the Global Competitiveness Report (GCR) of the World Economic Forum.

Ironically, the country has surpassed the urbanisation of South Asian average. While urbanisation in South Asia stands at only 31 per cent on an average, urbanisation in Nepal is 38 per cent.

In contrast, when compared to other South Asian countries, Nepal ranked in the last position in terms of telecommunication access. Likewise, the country is ranked in the sixth position in terms of road access and improved water access and in fifth position in electricity consumption.

The number of urbanised areas in the country shot up after the government declared 133 new municipalities in the last and this fiscal. Only 21 per cent of the territory was termed as ‘urbanised’ prior to the declaration of new municipalities.