Govt to endorse rupee bond directive this year: FinMin

KATHMANDU, JUN 19 -

Finance Minister Shankar Prasad Koirala has said the government plans to endorse in principle the directive on Nepali currency bonds this fiscal year .

Koirala made the remark during his meeting with Isabel Guerrero, vice president of World Bank (WB) for South Asia, and Karin Finkelston, Asia vice president of International Finance Corporation (IFC), on Tuesday. Guerrero and Finkelston are currently on Nepal visit.

IFC had submitted a formal request to the government last year for issuing local currency bonds.

Though the government and IFC have not divulged the size of the bond, sources say it could be anywhere between $100 million and $500 million.

Government officials believe issuance of such bonds will help attract both local and foreign investment as they help in long-term financing at a time when domestic commercial banks do not have the capacity to fund projects that need long-term financing.

“The Finance Minister told them that the government is positive on the IFC initiative and the ministry is also working jointly on the formulation of the bond,” said Madhu Marasaini, joint secretary at the Finance Ministry. “The bond mechanisms will help manage foreign currency risks,” he said. WB and IFC representatives are here to inform the Nepal government on their commitment to scale-up investment in Nepal, particularly for the development of hydropower. Minister Koirala informed them that the government has moved forward to make a congenial environment to attract foreign direct investment. He added the Nepal government has accorded top priority for the development of hydropower in the budget for the next fiscal year .

Guerrero expressed satisfaction over progress on Nepal’s investment capacity, and pledged to continue support and work together with the Nepali private sector on hydropower by increasing investment.

Source: The Kathmandu Post