Investors including FMO, the Dutch entrepreneurial development bank, CDC Group, the UK’s development finance institution and impact investor, Swedfund, the Swedish development finance institution, and the International Finance Corporation (IFC) have decided to contribute US$40 million to the first close of the Nepal-focused Dolma Impact Fund II (Dolma II) as announced today by Dolma Fund Management (DFM), the first international private equity and impact fund dedicated to Nepal. The target for the final close for this fund which invests primarily in renewable energy, healthcare, and technology in Nepal is US$75 million.
This announcement is considered to be significant as it comes at a time when COVID-19 cases in Nepal have surged thus following the trend in India. Dolma II’s target sectors are expected to directly address capacity constraints in healthcare and enable digital solutions to scale up rapidly which will be vital both during and after the pandemic.
Confirming that the second fund is an international vote of confidence in Nepal’s private sector and talent, Tim Gocher, CEO at DFM, said, “The first fund demonstrated the commercial and impact opportunities in Nepal, whereas Fund II is a big step to opening these opportunities to a broader set of foreign investors for whom impact is a priority.”
Stating that FMO is proud to support DFM as it will invest in the emerging tech sector and much-needed healthcare services and jobs in Nepal, Jaap Reinking, Director Private Equity, FMO said, “Not only does this support our ambitions towards accelerating climate action, financial inclusion and reducing inequalities, it also focuses on improving environmental and social conditions for many Nepalese workers and businesses.”
Underscoring that CDC’s investment in Dolma II reaffirms a commitment to help to attract greater FDI to Nepal, particularly in renewable energy, technology, healthcare, and education, Srini Nagarajan, Managing Director and Head of Asia, CDC Group, remarked, “We are pleased that our commitment will play a role in supporting the country’s post-pandemic economic recovery, help enhance digitization, boost skills development and facilitate a thriving and resilient economy.”
Gunilla Nilsson, Head of Energy and Climate at Swedfund said that Dolma II focuses on Swedfund’s three core sectors i.e., renewable energy, financial inclusion, and healthcare while technology and increased digitalization are overarching themes for these. A strong driving force behind Swedfund’s investment is to increase the number of decent jobs in the formal sector and stimulate the local economy in Nepal and Swedfund is pleased that the fund is also expected to contribute to women’s economic empowerment, she added.
Babacar S. Faye, Resident Representative of IFC in Nepal, was of the view that private equity funds can be an important source of capital and expertise for local entrepreneurs in Nepal particularly in allowing them to expand their businesses, create more jobs and provide essential goods and services. Dolma is the second investment in the private equity market in Nepal and it is hoped that this will have a demonstrable effect beyond financial returns by attracting more investments, he commented.
The Dolma Impact Funds I and II are aligned to Nepal’s SDG targets. For SDG 5 – Gender Equality, Dolma II qualifies for the 2X Challenge to drive gender balance in the portfolio whereas for SDG 8, 9, and 10 – relating to Work, Industry and Inequality, Dolma I’s portfolio companies have generated quality employment for almost 5,000 people in Nepal since 2014.
