KATHMANDU, APRIL 14
Despite the huge potential, Nepal has continued to struggle to attract investment in various prospective sectors. Against this backdrop, Arpana Ale Magar of The Himalayan Times caught up with Chief Executive Officer of Investment Board Nepal Sushil Bhatta to talk about the recent activities of IBN and the future plans. Excerpts:
Despite several efforts, why is Nepal not the first choice for investment?
In my view, a major reason for this situation is our trend of working in isolation. The government's efforts on investment need to be very much collaborative and integrated regarding investment. Every new investment sets ground and creates an environment for another new investment.
Once projects are developed, associated issues will also be gradually identified and settled, and it further improves the investment climate.
We must develop bankable and credible projects to attract quality investments in Nepal, which we have already started by establishing the IBN Project Bank. We need to cut short the process for doing business significantly by revamping institutional as well as individual working method and defining criteria for screening and selecting project proposals.
Hence, we have come up with the concept of the war room that would function as the focal point to deal with all investment-related issues, provide integrated service to investors and maintain an investment-related database. We still have much to achieve in policy reforms regarding land reforms, environmental impact assessment, among other vital components of project development. I am quite optimistic that Nepal will gradually be developed as an attractive investment destination along with the government''s efforts on legal reforms and procedural simplifications targeting investment.
What were the major activities carried out by IBN under your leadership?
Though my seven-month period at IBN is not too long, the office has taken a numbers initiatives in investment promotion, investor service, institutional development, project development, and policy advocacy over the period. IBN has been functioning with a blend of civil servants and embedded consulting staff, facilitating major transformative projects in hydropower, industry, tourism, among others. For example, the cement projects that we have been facilitating are the country''s largest. All these companies, including Hongshi Shivam, Huaxin Cement Narayani, Samrat Cement, and Dang Cement have a combined production capacity of 25,000 tonnes per day. Among the projects presented at the Investment Summit, 2019, IBN has received detailed project reports (DPRs) of Damak Industrial Park, Muktinath Cable Car, and two Flash Freight Logistics Parks and those reports are under review at the moment.
We believe in the principle of 'reach, retain and regain' to promote investment by providing fair treatment to all investors. We have developed strong strategies to retain the existing investors and reclaim the past investors in Nepal. During the seven months, IBN has approved around Rs 38 billion worth of investment in three hydropower projects.
We have also selected a developer and will soon issue the survey licence for the development of the indicative 679 MW Lower Arun Hydropower Project with an estimated investment of $1.3 billion after the IBN board's approval. The project is going to be developed under the public-private partnership (PPP) modality.
Similarly, we have recently signed an MoU for the development of 250 MW solar energy project to maintain an effective energy mix in the country with a 15 per cent contribution from solar.
What is your assessment of the impact of COVID-19 on projects and how challenging was the lockdown period?
Indeed, COVID-19 has hit the entire global economy and Nepal is not immune to this. We have witnessed its impact on IBN-facilitated projects also. After few months of slackness in construction activities, the projects have returned to normalcy while maintaining health and safety protocols. The mild impact was seen in construction works but the projects are not missing their original deadlines for key milestones.
For example, the Arun-3 Hydropower Project developer informed us that the project will achieve its commercial operation date (COD) almost 18 months earlier than the originally scheduled date.
We put all efforts to minimise the COVID impact on projects. We've visited almost all projects to observe the situation and provide hands-on support to them. We also made the best use of digital platforms like Zoom and Microsoft Teams to reach out to the investors and provide the required support to them. Our efforts did not leave any gap in our service to investors and investment promotion activities.
Recently, the government decided to establish a chemical fertiliser plant in Nepal under IBN leadership. What is your say on this?
In line with the government's decision, the Chemical Fertiliser Plant project is coming under IBN soon.
We are still to get a formal notice. So, we are going to appraise the chemical fertiliser project to make it technically and economically feasible.
We would explore an appropriate approach to develop the project with quality investment.
What are your plans for investment promotion?
For investment promotion, we have prioritised economic diplomacy and accelerated investment dialogues with Nepal''s missions abroad and foreign missions in Nepal. We have had dialogues with officials of the British, US, Israeli, Russian Embassies, among others, to make them aware about investment opportunities in Nepal. Similarly, we are planning to set up a dedicated investment promotion unit at Nepali embassies abroad as well. We have geared up to institutionalise the IBN project bank and are developing a source of bankable and credible PPP projects. We have completed the first round of discussion on project identification, selection, ranking, and prioritisation of projects for developing the project concept note (PCN). Following the development of PCN, we will market these projects for garnering quality investments in the near future.
We have also focused our attention on IBN's institutional development.
We are going to establish a robust and transparent system for providing prompt services to investors and develop such a system in IT platform. To develop stronger stakeholder relations, we have developed a communication policy and have been visiting IBN-facilitated projects frequently to assess the ground situation. Further, we are developing a web-based automated one-stopservice, knowledge management portal (KMP) to accelerate our facilitation for quality investment.
What are IBN's future plans to strengthen investment sector?
We are in the final stage of developing the IBN Strategic Plan and IBN Strategic Business Plan to attain the objectives of the IBN as per the Public-Private Partnership and Investment Act 2019. Thus, our upcoming programmes will be in line with our strategic plan which is focused on creating an investment-friendly environment with investment security, guaranteeing better return in investment, creating comparative advantages, market-driven and demand opportunities, and develop an action plan for improving the investment ecosystem. Our focus will also be on boosting industrial investment to raise the contribution of the industry from 6.5 per cent to gross domestic product (GDP) to around 20 per cent by 2024. To attract investment in industries, we need to develop industrial infrastructures and develop project-specific data ecosystem. A collaborative approach among the agencies is required to establish Nepal as a promising investment destination of choice for investor. Accordingly, we are giving a high priority to developing IBN as a centre of excellence and accelerating policy advocacy activities to settle policy blocks in investment.
A version of this article appears in the print on April 15, 2021, of The Himalayan Times.