Central bank plans local currency bond
KATHMANDU, FEB 29:
The central bank has proposed to the International Finance Corporation (IFC) — a lending window of the World Bank — to help float a local currency bond.
“Since there is a mismatch between long-term credit demand and short-term liquidity, the central bank has suggested the IFC to help float a local currency bond,” according to central bank governor Dr Yubaraj Khatiwada.
The mismatch has made it difficult for financial institutions to lend for long-term investment projects. During his meeting with the Nepal Rastra Bank (NRB) governor, executive vice president and chief executive of IFC Lars Thunell thanked the government for its support to IFC’s ongoing investments in the financial sector in addition to the payment reform project and other interventions aimed at making ‘doing business’ easier.
The visiting IFC delegation, led by Thunell, today met Prime Minister Dr Baburam Bhattarai and reiterated IFC’s commitment towards increasing investments in Nepal, particularly in infrastructure, and to support private sector development.
“IFC sees great potential in Nepal,” explained Thunell after his meeting with the premier at the latter’s office. “We believe that the country can grow rapidly in the near future.”
This is Thunell’s first visit to Nepal. IFC offers services both as an advisor to the government and as a financier to the private sector, especially in infrastructure, microfinance and financial sectors. IFC’s strategic agenda in Nepal includes priority sectors of infrastructure; financial sector including access to finance for small and medium enterprises (SMEs) particularly for women entrepreneurs, tourism and agribusiness.
Thunell also met finance minister Barshaman Pun yesterday and shared details of IFC’s ongoing assistance to the government in simplifying regulations relating to business licensing, registration and taxation to attract investments. Underscoring the continued support towards strengthening the financial sector and providing support to SMEs, he however, asked Pun to create a conducive environment for investment.
Pun, on the occasion, apprised him of Nepal Investment Year and the government’s plan to attract foreign investments for 50 mega projects to propel economic growth. “IFC is keen on supporting essential infrastructure projects, particularly hydropower, to help meet development needs,” said Thunell, during his meeting with Minister of Energy Post Bahadur Bogati.
Last year, IFC invested in a run-of-river hydropower project with Butwal Power.
The IFC — which sent a high level delegation that has been busy meeting the finance minister, central bank governor and other government officials since last week — has focused on Nepal in South Asia after 2008, when it reopened its Nepal office, though it has been engaged in Nepal since 1970.
Meanwhile, IFC’s committed portfolio of $25 million covers projects including power, air transport, banking, microfinance, and trade finance. It is committed to supporting investment climate, strengthening local financial institutions, improving access to finance, promoting trade, and helping address climate change impacts. IFC delegation includes South Asia director Thomas Davenport, Asia infrastructure director Anita George and country manager for Bangladesh, Bhutan and Nepal Kyle Kelhofer.
Source: THT
