The Investment Board Nepal, which has been seeking expressions of interest from domestic and foreign investors for project investment, is now preparing to attract investments through an alternative method.
Despite listing various projects and inviting expressions of interest, investors have not shown much interest. As a result, the board is now considering the Swiss Challenge Method under the Public-Private Partnership and Investment Act, 2018.
Under this method, investors can propose investments in projects that are not included in the list for expression of interest. The Swiss Challenge Method allows the concerned authority to invite competitive proposals for the same project and proceed with its development based on competition.
Section 28 of the Public-Private Partnership and Investment Act, 2018, includes the provision for the Swiss Challenge Method. During the third Investment Summit held in April 2024, the government had invited expressions of interest for the development of listed projects. However, due to a lack of investor response, alternative approaches are now being explored.
According to Pradyumna Prasad Upadhyaya, Under-Secretary and Spokesperson for the Investment Board, discussions are ongoing to adopt the Swiss Challenge Method since listed projects have failed to attract sufficient interest. “Investors have not shown much enthusiasm in the expressions of interest,” he said. “Considering that investors might be interested in projects beyond the listed ones, discussions are underway to implement the Swiss Challenge Method.”
With this method in place, interested investors can propose unsolicited projects that have not been publicly invited. "The Swiss Challenge allows unsolicited project proposals to be brought into competition," Upadhyaya explained. "If no proposals were received even after inviting expressions of interest, it indicates underlying issues—either in project design or investor interest. This method provides an opportunity for private investors to design projects and propose them to the board, which can then decide whether to move forward based on feasibility."
Under the Swiss Challenge Method, private investors can independently design and propose projects for construction and sale. Public and private entities can propose projects in any potential sector beyond the listed ones.The Investment Board will approve investment proposals after evaluating them through competitive methods. Under this provision, any unsolicited project proposal can be evaluated by inviting competing offers or making it public for assessment.
Upadhyaya further added that the Swiss Challenge Method is being considered as an alternative approach to attract investments in unlisted but promising sectors.
Unlike traditional methods, the Swiss Challenge does not require a formal Expression of Interest (EOI) invitation from the board. Instead, investors can independently identify and propose projects. Additionally, if another party submits a more viable or cost-effective proposal, the initial proposer may either match the offer or be reimbursed for preliminary expenses, studies, and development costs incurred in the early stages of the project.
Limited Response from Foreign Investors
Despite the government’s efforts to create an investment-friendly environment by amending over a dozen regulations, foreign investors have remained skeptical. During the third Investment Summit on 28–29 April 2024, the Investment Board Nepal invited expressions of interest for 12 different projects. However, no foreign investors submitted proposals, despite multiple notices being issued.
Instead, two domestic companies submitted proposals for the Janaki Heritage Hotel & Cultural Village and the Babarmahal Administrative Plaza projects. However, both proposals failed to pass the evaluation stage.
Now, the board plans to move forward with both the Swiss Challenge Method and the traditional expression of interest approach to encourage investment. However, Upadhyaya clarified that already listed projects cannot be shifted to the Swiss Challenge Method. Only identified but unlisted projects, which have undergone initial feasibility studies, can be considered under this method.
