Chinese Investment Uncertain due to Lack of Clear Policies

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Chinese Investment Uncertain due to Lack of Clear Policies

May 24: Chinese investment in hydropower sector of Nepal has been uncertain in the absence of clear policies regarding security of foreign investment.

The failure in implementation of Chinese investment proposals worth Rs 36 billion in the last fiscal year resulted in not a single commitment from the northern neighbor this year (FY 2018/19).

Altogether 12 hydropower projects are under-construction with Chinese investment or in agreement with Chinese investors. Those projects which have a target to produce 1368 megawatts of electricity require investment of Rs 286.82 billion.

In recent years, Nepal has received more investment commitment from China than any other countries. According to the Department of Industry, China started proposing for investment in the energy sector of Nepal since FY 1998/99. FY 17/18 saw the highest amount of proposals worth Rs 36.5 billion from China.

However, this FY Nepal has not received any investment proposal from China, according to the Department. The lack of interest by Chinese investors has been attributed to the failure to implement the investment proposals of last FY.

President of Independent Power Producers' Association Nepal (IPPAN), Shailendra Guragain said that if the foreign investments are not secured, Chinese investment will also likely stop just like the Indian commitment. He explained that lots of Indian came to Nepal for investing in hydropower projects12 years ago. However, they returned disappointed after figuring out that their investment won’t be secure here.


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