Investment Opportunities (Speech)

Keynote Speech of the Ambassador at the seminar on 'Investment opportunities in Nepal: Hydropower and Tourism', Brussels, 14 February 2014

Mr.  Dick Gupwell, Vice- Chairman of EIAS

Prof. Valerie Ndaruzaniye, President, Global Water Institute

Prof. Dr.  Sri Ram Poudyal, Chairman, Institute of Policy Research Nepal and Board of Director, Nepal Rastra Bank 

Dr. Ram Hari Aryal, Former Secretary, Government of Nepal and Board of Director, Nepal Rastra Bank

Excellencies and distinguished participants!

 

A very good morning to you all!

 

On behalf of the Embassy of Nepal in Brussels, and on my own, I thank you all for showing interest in Nepal by joining this seminar today.

I thank EIAS for organizing this seminar in collaboration with the Embassy, one of its kind to mark the occasion of the successful completion of 50 years of diplomatic relations between Nepal and Belgium. I appreciate Mr. Goethal for promptly arranging this event. I thank with much appreciation Prof. Ndaruzaniye, Prof. Dr. Poudyal and Mr. Aryal, the panellists for today's discussion, on their valuable time and contribution to this seminar.

Let me begin with a brief introduction of Nepal. Nepal is a unique and diverse country in South Asia located between two huge and rapidly growing Asian economies, China and India. With the territory of 147,181 sq km, the population is 28 million. Nepal ranks 93rd in terms of its territory whereas 46th in terms of its population. GDP of the country at present is $18 billion and per capita income is $ 700 . Nepal is one of the least developed countries endowed with virgin natural beauty. The city area has modern economy whereas the rural area is mostly dependent on subsistence agriculture.

Nepal is located on the southern lap of the Himalayan Range from east to west. Due to this elevation, Nepal enjoys fascinating geographical diversity starting from 70 meters from the sea-level in the southern plain along the Indian boarder, to the summit of Mt. Everest at 8,848 meters on the Northern border with Tibet Autonomous Region of the People’s Republic of China. Within the perimeter of 850 km east west length and 145-241 km of north south breadth, Nepal possesses different valleys, river basins, hills, mountain peaks, gulfs and steep slopes. This diverse range of landscape boasts of varieties of climatic conditions from tropical to tundra and corresponding wide range of flora and fauna.

However, due to some reasons, including our relatively recent history of modernization and experiment with democratic governance system, which is punctuated by quite turbulent and often protracted periods of political transitions, the country has not been able to reap the benefits of its rich human and natural resources yet.

Politically, we are engaged in the task of political and socio-economic transformation of Nepal through peaceful and democratic means and make it a stable, inclusive, full-fledged democratic and prosperous country following the people's movement of April 2006. Given the relative maturation and consolidation of our democratic governance system after that as tested by the successful and peaceful election to the second Constituent Assembly elections in November 19 last year, and the election of the new Prime Minister on the 10th of February, we are standing in front of a historical political and economic opportunity at this moment of time.  

Hence, Nepal is now oriented towards bringing about commensurate economic transformation to sustain and support the hard earned political gains. The government is gearing up with all its resources and apparatus to realize this objective. It is in these lights that we are gathered here to ponder on the ways of best utilising the opportunities Nepal offers for its own people, as well as investors, friends and partners around the world. The resources are there. Obviously the potentials have been lying almost untouched so far. What is still missing is the investment and know-how to harness and utilise both the human and natural resources in a sustainable method.  There are many sectors of economy in Nepal that are highly attractive for foreign direct investment, like agro-processing industries, organic farming, software and service industries (for example: old age homes) and many more. However, we are focussing today on two basic areas for investment in Nepal.

That brings me to these foremost and promising sectors of Nepalese economy – hydro-power and tourism. Let me focus on hydropower first. In comparison to the size of its territory, Nepal has relatively high concentration of perennial rivers. There are around 6,000 rivers and streams in Nepal. Topographically this is an ideal situation for generating environmentally clean hydropower. This is for this reason that Nepal is considered one of the few countries having highest potential in terms of hydropower generation per square unit area. It is estimated that Nepal possesses around 83 thousand megawatt potentials of hydropower generation. Out of that, around 43 thousand megawatt is economically feasible in the current circumstances.

However, almost all of this commercially feasible hydropower generation potential has not been realized yet. At present, Nepal is generating only about 700 MW of hydroelectricity. However, the current domestic demand could be safely projected at around 2000 megawatt. This demand for a population of 26 million Nepalese with the acceleration of economic activities in near future would surely go up. Apart from this, for bigger investors, there is huge market for electricity in our neighbouring countries, India and China, which are actually energy hungry countries. Especially, the most populous and economically rapidly growing northern India, which borders just next to Nepal, could surely be a reliable market to sell the excess electricity.

The Government of Nepal has adopted liberal policy to attract private and foreign investment in hydropower projects. Nepal Electricity Authority (NEA), a government owned organization purchases electricity produced by companies. To transport electricity from new power stations, the government is constructing 29 high voltage north-south transmission lines to connect different parts of the country. The soft loan of 55 million euro to launch 140 megawatt Tanahun hydropower project signed last year is a remarkable instance of cooperation of European Union.

Talking about tourism, due to the same reason of natural diversity, tourism prospects of Nepal is very high. Diverse landscapes, ethnic and cultural diversity, diverse flora and fauna all contribute to creating an ambience that could be a mini world in itself. The southern plain with almost tropical summer, the warm inner valleys and the lower mountain basins with modest subtropical climate, the high mountains with cold temperature, the desert like northern valleys of Manang and Mustang, and the perennially  snow-capped Himalayan range with its tundra-like climate can attract tourists from all over the world. Out of 14 peaks higher than 8000 meters in the world, 8 are located in Nepal around the 850 km northern Himalayan range.

The geographic diversity can also be seen reflected in equally varied and beautiful natural landscapes, beautiful sceneries and bio-diverse flora and fauna. Corresponding ethnic and cultural mosaic adds beauty to the natural scenes. Nepal is a multicultural, multi-religious, multi-lingual country. There are 125 ethnic groups with 100 different languages. The country is a beautiful blend of Hinduism and Buddhism with addition of Christianity, Islam and other religions. Lumbini, the birth place of Gautam Buddha, is in Nepal. Including this, there are 10 world heritage sites in the country. Nepal is one of the oldest human civilization. This rich cultural and historical heritage could be another attractive point for tourism.

Apart from these tourism attractions, Nepal can be developed into a good adventure sports destination. Ski resorts can be promoted with investment in appropriate research and infrastructure. Bungee jumping and rafting are already in use, though in small scale. Trekking and mountain climbing already enjoy world-class reputation.

Despite these resources Nepal invites a figure of around a million tourists per year. With this potentials and additional investment from abroad we can develop a strong tourism industry in the country attracting huge number of tourists. This can be another attractive and safe area in which foreign investors could make long-term investment with assured profit.

Nepal can be a favourable investment destination. It is located between two of the world's populous countries and rising economies, India and China, with easy access to both the vibrant markets. There is affordable labour and low land cost, hence, high profitability. The bureaucracy is cooperative with foreign investment. Moreover, the natural resources of Nepal offer an opportunity for sustainable long term investments.

Regarding the investment environment in the country, Nepal already has one of the most liberal and foreign direct investment friendly legal frameworks in South-Asia. Nepal Investment Board has been established to facilitate the investment in Nepal creating one window solution for potential investors in big projects. While welcoming foreign investments, the government is committed to creating an environment for foreign investors to take the returns home conveniently. The country has easy profit repatriation laws and regulations. "Foreign Investment and Technology Ac" has assured security for industries. Similarly, the laws of Nepal guarantee the security of investments against nationalization. The Government will do everything within its means to create further investment friendly environment.

In this context, I would like to request you, and through you, to the prospective investors, that Nepal can be a good place to be considered to make investment, especially in hydropower and tourism to begin with.

My mission in Brussels will accord best possible assistance in your interest and investment endeavors in Nepal.

I sincerely request you all to actively participate in the seminar. I am confident that you will all enjoy today's discussion. I am hopeful that the program will be successful and fruitful too.

Thank you very much for your kind attention.

Thank you.