In order to support foreign direct investment (FDI) in Nepal and to strengthen Nepal’s recovery from COVID-19, on March 19 the Swiss Agency for Development and Cooperation (SDC), CDC Group, the UK’s development finance institution, and FMO, the Dutch development bank launched Nepal Invests, a platform expected to drive increased investment in the country.
Perceived to be the first initiative of its kind in Nepal, Nepal Invests aims to support the promotion of entrepreneurs and private sector innovative activities across the country. It is also intended to complement existing efforts to attract more investments and to advance development by channeling efforts to unlock the possibilities of investing persistent and flexible capital to support private sector growth and innovation.
Foreseeing significant economic pressure as a result of potentially volatile remittance inflows resulting from the current state of the COVID-19 pandemic, the joint press statement issued by SDC, CDC Group, and the FMO reads, “Nepal Invests will support the economic recovery from COVID-19 in multiple ways such as partnering to address business environment challenges, exploring innovative ways to finance small and medium-sized enterprises (SMEs) and increasing the skills and capacity of local investment professionals.” These measures are designed to better prepare Nepal’s market for increased investment from development finance institutions, frontier players, and intermediate vehicles to support the medium-term economic recovery, the statement added.
Underscoring that Switzerland is a long-standing development partner of Nepal and is committed to supporting SMEs to grow and contribute to Nepal’s economic development, Elisabeth von Capeller, Ambassador of Switzerland to Nepal, said, “Attracting and mobilizing private investments will be key in achieving the economic transformation agenda that Nepal has set for itself and the SDC is delighted to partner with CDC Group and FMO to support Nepal Invests platform which will contribute to preparing the Nepali market for greater investments.” This initiative also sets a precedent for future collaborations of this nature between development partners (DPs) and development finance institutions (DFIs) to contribute towards Nepal’s economic advancement, she added.
Highlighting that CDC is an active investor in Nepal that wants to encourage more FDI into the flourishing nation, Srini Nagarajan, Managing Director and Head of Asia at CDC Group, remarked, “We are delighted to partner with FMO and the Swiss Government in this unique collaboration between DFIs and DPs in Nepal that aims to attract foreign capital into the country. The role of DFIs has been important in Nepal and will remain important after COVID-19, to support green growth and economic transformation. I am confident this initiative will help us deepen our contextual understanding, forge partnerships and enable us to do more.”
Emphasizing that FMO has played a pioneering role for development finance in Nepal, Andrew Shaw, Manager for Capacity Development at the FMO, commented, “With our support to Nepal Invests, we hope to accelerate investment in the country and to support foreign investors to increasingly focus on Nepal. As part of Nepal Invests, FMO is committed to support the Nepalese private sector to raise its environmental and social standards together with local stakeholders and to facilitate the adoption of international environmental, social, and corporate governance practices to create a level playing field between companies and improve access to DFI funding in the country.”
Managed by Nathan Associates in Kathmandu, the federal capital city of Nepal, Nepal Invests represents a ground-breaking collaboration between DFIs and DPs in the country. It reflects shared objectives to support business growth, strengthen investment and accelerate Nepal’s economic recovery from COVID-19.
The platform also intends to mobilize additional support projects and contributions from other DFIs and DPs at the same time as it engages closely with the needs of the Nepalese private sector.