RENDEZVOUS
Since visiting the Langtang region in 2003 where he met his wife, to establishing the Dolma Fund Management in 2014, Founder and CEO Tim Gocher OBE has invested millions of dollars through Dolma Impact Fund I and Dolma Impact Fund II in Nepal's tech, healthcare, and energy sectors and created 10,000 jobs. Sangay Sherpa from The Himalayan Times met with Gocher to gain insights on his experiences in establishing the first international private equity fund in the country that was awarded one of the highest-ranking honours in the UK for his contribution to Nepal's development. Excerpts:
Can you tell us about the Dolma Impact Fund, its long-term goals and objectives for Nepal, and the achievement made so far? Also, please share the challenges faced.
I've always wanted to use private sector investment to grow prosperity in Nepal.
While education through charity is important, the economy won't develop if there aren't jobs to go to. The country was going through an insurgency, so it was not possible to raise money or invest in Nepal in 2003. But by 2011, the success of the peace process was obvious and whatever the political settlement, the war was not going to start again. After dedicating myself to raising the first international private equity fund for Nepal, which took three years with no guarantee of success, we successfully raised the first fund in 2014.
Dolma Fund Management is the fund manager of Dolma Impact Fund I and Dolma Impact Fund II. We first raised $20 million, but we expanded that fund to $36.6 million in the end. That fund is now fully invested across three sectors - renewable energy, healthcare, and technology.
The main challenges were in the understanding of corporate governance standards, especially environmental and social governance standards, including health and safety practices. Challenges like the red tape were there but I knew about them in advance and it was no surprise for me. Although we have always gotten approval for everything we need to do, it does take longer than in some countries.
Can you share your views on the current economic situation, both globally and locally? Has it affected any of your major plans for the country?
There are economic challenges all over the world. But, of course, Nepal is also going through challenges like high interest rates and inflation. What happens during an economic problem is that money goes to safer places. So you have a lot less investment in emerging and developing markets. We at Dolma believe in the long-term prospects of Nepal.
In the last three months, we have invested over $20 million in the country, including WorldLink, Seti Khola Hydropower, and Foodmandu and we have more investment coming up. If you are a dedicated long-term investor, you don't pull out or stop investing when the going gets tough.
Now is the time to invest.
Overall we still see it as an opportunity. We cover 60 per cent of Nepal's foreign direct investment, which shows that we are increasing our investment even as the world slows down.
How do you assess the investment climate in Nepal at present and the factors affecting it?
Our whole investment thesis is based on the fact that Nepal is not as risky as the world thinks it is. The institutions in Nepal are stable, even during the Maoist crisis and before the Constitution. The central bank has existed for decades throughout all these problems and remained stable. There is a difference between the inter-national perception risk of Nepal and the actual risk. It's still risky but if you look at things like its payment track record, Nepal has never defaulted on an international debt obligation. I wish the country did have a sovereign credit rating because the big investors living abroad who don't know much about Nepal will rely on the ratings.
If you look at the current economic crises in the region, Nepal has a steady inflow of hard currency thanks to international labour and is also macro economically stable. It is not going to run out of money to pay its external bills and so when you dig down, you realise that the system does work and bills get paid.
Then you have got the risk of red tape. We are familiar with and know how to deal with the system. It also takes time to get money in and out of the country but that's okay for us because all we do is invest here. The inconvenience will not stop us but it stops other investors. I think the government needs to attract investors,sell itself, and have a sovereign credit rating and an automatic route to allow companies to invest without needing multiple approvals to maximise their foreign direct investment.
At a time when Nepal's neighbours are enjoying large FDIs inflow, what are the key sectors the country can attract investment in and what is the right approach to achieving it?
From a policy perspective, it is the sovereign credit rating and the automatic route. Those two things are the main things that investors I speak to look for. It's the rules of investment for big fund managers abroad. India used to be similar a long time ago but the country introduced an automatic route for foreign investments. That doesn't mean it froze its anti-laundering rules. When banks receive money, it's their job under licence from the central bank to make sure that incoming money is not from dirty sources. What I am not saying here is to accept any illegal money but the best people to check that money are the receiving commercial banks.
Dolma has invested in AI and e-commerce firms, pharmaceutical manufacturing, medical care and the energy sector. What are the organisation's plans going forward?
Nepal will never be a manufacturing powerhouse because it lacks railways, good roads and water infrastructure, and electricity stability. But the country can become a powerhouse in the tech and digital economy. And if you like, that is one of the reasons why we have been investing more in tech-enabled companies because Nepal has a window of opportunities to catch up. There are a lot of very high-tech companies here.
Fuse machines have been around since 2009 and have been dealing with AI software development. I think that generative AI as a technology is still at the beginning of the efficiencies that we can achieve and a company that was started in Nepal is at the forefront of that and that is exciting. I see this as a once-in-a-lifetime opportunity for Nepal to attract investment in such sectors or the country will miss its window of opportunity during this digital revolution.
Though we have made a lot of investments in technology, it does not mean that we are not focusing on the other sectors. We have invested in the 22MW Seti Khola Hydropower Project and solar plants.
We are about to invest $4 million in Chirayu Hospital after just getting the FDI approval to expand it from 50 to 100 beds with additional facilities and services. So, we don't want to have all our eggs in one basket. If there is a sudden tech downturn we will be exposed to that. You get ups and downs in economies but one of the reasons we invest in multiple sectors is because they all need capital and we think they are all good investments and also diversification.
Can you highlight some key moments from your visit with Prince Williams in March and what was the purpose of the visit?
In June last year, the queen issued what was to be her last honours list. Every year, the monarch issues two honours lists - one in the summer and one around the year's end. I was given the honour of the OBE, that is, the Officer of the British Empire - a very prestigious award in the UK. It was given for services to British investment and economic development in Nepal. We created over 10,000 jobs in Nepal through our investment in our companies as well as of course my charity work here.
At the end of last year, I received a scroll, and on the top of it was the queen's signature which she had signed before her passing. Then in March, two months ago, I was invited to Windsor Castle to meet Prince William who hinged the OBE medal on my suit and immediately asked how I got involved in Nepal to which I pointed toward my wife 'Pooja Gurung'. On the occasion, Prince Williams also shared how the UK is proud of its relations with Nepal and the Gurkhas. Nepal is a very loved and respected country in the UK for all its 200-plus years of diplomatic activities but the pride in the Gurkhas is astonishing.
A version of this article appears in the print on May 29, 2023, of The Himalayan Times.
