Reforming the Investment Architecture

A major restructuring of the Office of the Investment Board Nepal (OIBN) is underway as the government seeks to address long-standing investor concerns over policy volatility, weak inter-agency coordination, and project delays. Officials say the reforms aim to bring greater stability, speed and credibility to slate-scale investments as Nepal faces intense regional competition for capital.

The reform package spans governance, legal safeguards, staffing, and project preparation. Speaking on December 7, OIBN Chief Executive Officer Sushil Gyewali said the restructuring gained momentum after the Gen Z protests of September 8 and 9, which disrupted economic activity and exposed deep institutional weaknesses.

In the days that followed, Minister for Finance Rameshore Khanal held discussions with officials from the OIBN, Nepal Rastra Bank (NRB), private-sector umbrella bodies, and business representatives who reported losses  during the unrest. “The restructuring has been taken forward specifically to address the concerns raised during those discussions,” Gyewali said at a public program. The consultations, he added, reinforced the need to shield major projects from political instability and to strengthen the foundations of Nepal’s investment framework.

A Credibility Test for Nepal

The reform push comes at a sensitive moment. Both domestic and foreign  investors remain cautious, unsettled by recent unrest, frequent regulatory changes, and the perception that large projects are vulnerable to political shifts. For policymakers, the issues go beyond institutional reform. Nepal’s credibility as an investment destination is at stake, particularly as neighboring countries are offering speed, certainty, and predictable rules. In this context, the success of OIBN restructuring could determine whether Nepal is able to turn expressions of interest into actual investment. While many of the challenges are familiar, the recent crisis has added urgency—and political weight—to reforms long discussed but only partially implemented.

Reform Shaped by Crisis

The Gen Z protests acted as a catalyst rather than the cause. Investors participating in the consultations raised  concerns that have echoed for years: policy unpredictability, overlapping mandates among government agencies, approval delays, and a lack of continuity after changes in government. What changed this time was the scale of disruption and the real economic cost of inaction. As a result, the current effort goes beyond procedural fixes. It targets deeper structural weaknesses that have limited OIBN’s effectiveness since its inception, including legal ambiguity, weak governance safeguards, and limited institutional capacity.

Revisiting the Legal Foundation

The OIBN currently operates under the Public–Private Partnership Act. While the framework has enabled some progress, it has also imposed clear limits.

Preparations are underway to amend the Act to refine and streamline its provisions.  Some changes have already been made, but officials acknowledge that broader  reform is needed to clarify OIBN’s mandate and strengthen its authority.

For investors, such legal clarity is not a technical detail but a prerequisite for long-term commitments. Without it, even well-intentioned policy announcements struggle to translate into bankable projects. The proposed amendments aim to reduce ambiguity over decision-making powers and create a more predictable legal environment for large investments.

Insulating projects from political cycles

Central to the restructuring is a redesign of OIBN’s governance architecture to reduce the risk of policy reversals after changes in government. One proposal under consideration is to include opposition parties within the Board’s broader decision-making framework. The rationale is straightforward. Investors have long complained that projects stall or agreed terms shift when political leadership changes. By embedding cross-party representation, policymakers hope to ensure continuity in investment policy even as governments come and go. “Even if the government changes, policy consistency is required,” Gyewali said. “Long-term projects cannot survive repeated shifts in direction.”

The proposed model draws inspiration from the advisory council used by the now-defunct National Reconstruction Authority, where Gyawali previously served as CEO. Under the plan, an investment advisory body chaired by the Prime Minister would include the leader of the opposition as vice-chairperson, along with representatives from major parliamentary parties and the private sector. The aim is to anchor investment decisions in cross-party consensus and signal that commitments will outlast electoral cycles. Former OIBN CEO Sushil Bhatta says the effort builds on ideas discussed over the years. “The restructuring was initiated earlier,” he said. “This is an attempt to finally institutionalize those ideas.”

Strengthening Legal Certainty Another pillar of the reform is legal protection for investors. OIBN plans to ensure that future changes in laws or regulations do not undermine agreements already signed. Under the proposed approach, project implementation agreements would include explicitly protection clauses, with compensation provisions if legal harm the viability of the project. There are also plans to route major project development agreements through the Cabinet. While this may lengthen approvals initially, officials argue that it reduces the risk of disputes or reversals later on—an important consideration for capital-intensive projects.

Building capacity

Governance and legal reform alone will not be sufficient if the institution itself lacks the capacity to deliver. Gyewali says restructuring must also mean expanding OIBN’s scope and managing its human and financial resources more effectively. “The goal is to make the institution sustainable in the long term,” he said.

Historically, OIBN has focused heavily on the energy sector, particularly  hydropower. While energy remains central to Nepal’s development, officials acknowledge that the country’s investment needs extend far beyond one sector. Under the new approach, OIBN’s mandate would expand to include infrastructure, transport, information technology, agriculture, and health sectors. “At present, all the work is being handled by government officials,” Gyewali said. “That needs to change. The institution requires a proper human  resource structure, including experts, not just bureaucrats.”

Lessons from Abroad Ghanashyam Ojha, Director General of the Confederation of Nepalese Industries (CNI) and a former OIBN official, says the problem lies less with the institution than with how it has been supported and understood. “The OIBN is vital for Nepal. Similar agencies exist across the world,” Ojha said. “Globally, they function as single-window institutions ensuring  effective coordination among government agencies. OIBN was created with the same objective.”

He cited examples from the United Kingdom, Bangladesh, Singapore, Malaysia, and Thailand, where investment agencies wield strong coordinating authority. “If the institution is not effective in Nepal, the fault does not lie with the institution itself. The weakness is in the supporting government machinery,” he said. Despite its limitations, Ojha says that OIBN remains indispensable for the country. Citing Malaysia’s experience with the Malaysian Investment Development Authority, he explained how a strong investment facilitation agency can shape  national development. He also pointed to India’s Invest India, which, under the Gati Shakti framework, has built a robust mechanism for inter-agency coordination.

Avoiding Another Layer of Bureaucracy Ojha cautioned against turning OIBN into just another bureaucratic body. “If it becomes another ministry, it becomes meaningless,” he said. “Instead, it should function as a center of excellence—providing expertise across  sectors rather than executing projects itself. Its role should be advisory—guiding how projects should proceed, not running them.”  According to Ojha, the OIBN should focus on project structuring, public–private partnership models, equity management, loan structuring, and financing strategies, while supporting line ministries with technical expertise. He also highlighted the loss of institutional memory caused by frequent leadership changes. “When new institutions are created, there is often no proper handover.  With frequent changes in government, the original vision is lost,” he said.

Making the One-stop Service Real Long-delayed reforms are also being revived, most notably the creation of a genuine one-stop service center for investors. Although promised since OIBN’s inception, the initiative has repeatedly stalled because officials deputed from line ministries lacked decision-making authority. Under the new model, staff assigned to the one-stop center would be backed by legal provisions granting them full authority to clear applications and resolve inter-agency issues. Guidelines are being prepared, along with efforts to digitally integrate processes across 14 agencies. If implemented as planned,  the system could sharply reduce approval times and transaction costs.

Fixing the project preparation gap

The restructuring also targets a structural weakness that has plagued large projects in Nepal: inadequate preparation. Too often, proposals are sent for approval without robust feasibility studies, financial modeling, or risk assessments, increasing the likelihood of delays and disputes. Under the new approach, OIBN plans to take a more proactive role in project preparation, allowing well-developed projects to be taken to market through transparent competitive processes rather than ad hoc negotiations. Strengthening project pipelines at an early stage, officials argue, will not only boost investor confidence but also improve project outcomes.

Internal reorganization

As part of the overhaul, OIBN is set to expand from two directorates to four, reflecting its broader mandate and the need for greater specialization. The new directorates will cover planning and administration; public–private partnerships; investment promotion and facilitation; and project development and management. Human resource reform is central to this effort. OIBN plans to recruit around 30 specialist professionals with expertise in project development, financial analysis, and investor negotiations. In addition, about 40 officials from relevant ministries are to be deputed to support the single-window system, this time with clearly defined roles and decision-making authority. An Organization and Management study has already been completed, and its recommendations are awaiting final approval. At present, the OIBN operates with just over 30 staff, but estimates suggest it will require around 107 personnel to effectively carry out its expanded responsibilities.

A necessary, if overdue, reform The restructuring blueprint builds on OIBN’s Strategy and Business Plan for 2024–29, but formal endorsement through a Board meeting chaired by the Prime Minister is still pending. Until that approval is secured, the reforms will remain preparatory rather than operational.

If implemented as intended, the changes could shorten project timelines, reduce policy uncertainty, and strengthen public–private partnerships. More  fundamentally, they signal an effort to reposition the OIBN from a largely reactive body to an institution that actively shapes and manages the country’s investment pipeline. Bhatta says the reforms are long overdue. “Ideally, this should have been done from the very beginning,” he said. “But staffing numbers alone are not enough. What matters is multidisciplinary expertise—social, technical, financial, and environmental.”

Ultimately, the success of OIBN restructuring will be measured not by amended laws or revised organizational charts, but by results: faster project delivery, fewer disputes, and stronger investor confidence. In a region where capital is increasingly mobile, Nepal cannot afford repeated false starts. Whether this reform finally breaks that cycle may prove  one of the country’s most consequential economic tests.

(This report was originally published in January 2026 issue of New Business Age magazine.)