FDI pledges in H1 surpass last FY figure
KATHMANDU, MAR 22 -
In an indication of foreign investors’ renewed interest in Nepal, foreign direct investment ( FDI ) commitments in the first-six month of current fiscal year have already surpassed those in the entire last fiscal year.
In the first half of 2012-13, FDI commitments stood at Rs 9.53 billion, according to the Department of Industry (DoI) data. The figure for the last fiscal year (2011-12) was Rs 7.14 billion.
If the trend continues, this year’s FDI commitments could be the highest in the last five years. The highest commitment in the last five years came in 2010-11, with investors pledging Rs 10.05 billion.
As per the DoI data, 33 countries have pledged to invest in 149 projects in the first half. The commitments in the same period last year was Rs 3.37 billion for 107 projects.
Government officials are buoyed by improving foreign investors’ interest on Nepal. “This is a positive development,” said Radhesh Pant, CEO of the Investment Board Nepal (IBN). “It illustrates the fact that investors are keen in investing in Nepal despite knowing the risk factors.”
DoI Director General Dhruba Lal Rajbanshi attributed the growth in FDI commitments to the establishment of IBN and its activities and launch of investment portal, among others.
The data for the first half throw interesting facts. The largest FDI commitment has come from Hong Kong — much higher than that coming from mainland China. Three investment proposals worth Rs 2.90 billion have been pledged from Hong Kong. This is the first time that such a huge FDI commitment has come from Hong Kong.
The country received the second biggest FDI commitment from Spain although it is not a big foreign investor in Nepal. Spanish investors have pledged Rs 1.78 billion for three projects, according to DoI.
The third largest investment commitment has come from United Arab Emirates worth Rs 1.12billon. The investment pledge from mainland China stood at Rs 981 million.
India, which has historically been the biggest FDI contributor to Nepal, has made a commitment of Rs 780 million.
However, in terms of the number of commitments made, China tops the list with 47 pledges, followed by India with 19 and South Korean and the United States with 10 each.
The service sector is where the foreign investors have pledged the most money. In the first half, service sector attracted FDI worth Rs 4.03 billion, followed by energy and manufacturing sectors. Of the proposed FDI , service accounted for 42.28 percent.
Source: The Kathmandu Post
