Interesting FDI facts ..

just wanted to share these two facts,which I thought was interesting ...............................

1. responsAbility Social Investments AG,one of the world's leading asset managers for social investments that specializes in sectors such as microfinance, SME financing, fair trade and independent media, has invested in Nepal ........ responsAbility has invested in Media Development Loan Fund (MDLF). MDLF gives independent media loan and equity support to media organization in countries where freedom of press is weak. In 2010 ,MDLF provided new funding for two media companies in Nepal − the Jagadamba Press newspaper and the Communication Corner radio broadcaster ..........click here to read more
2. CDC Group plc (‘CDC’), the UK’s development finance institution (DFI), announced a new US$50 million investment in the first-ever equity investment fund to focus on the very poorest parts of India. CDC is an anchor investor in the Pragati Venture and Incubator Fund (‘Pragati’) and has played a significant role in getting the fund started.CDC.In 2011 CDC announced a high-level new business plan, with a geographic remit focused on low income and lower-middle income countries in sub-Saharan Africa and South Asia. As well as acting as a fund-of-funds investor CDC will now also provide debt and direct investment to businesses in these regions. Click here to read more Can Nepal expect more foreign direct investment from these impact investors ??

insuring the poor in Nepal .....

Lloyds’ Insurance in Developing Countries Report estimates the number of people who are underserved by insurance to be between 1.5 - 3 billion people ...........

.source:Leapfrog

In context of Nepal :

The Insurance Board of Nepal has called upon all insurance companies in the country to expedite the process of issuing microinsurance policies so that low-income groups could cover life, health and sources of livelihood such as cattle or shops.Click here to read more

Good Market Opportunity ??

Prime MinisterOF Nepal in India ....... begging thy neighbor ??

1. India is thinking about setting up its own aid agency. Why should others give aid to India? click here to read more

2. Cabinet okays BIPA, DTAA signin .Gives go-ahead to the $250m line of credit deal.....click here to read more

   
   

   
   
   
   
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Walking the talk....

These days we hear a lot about interest in investing in the hydro power sector.... In past couple of weeks, we have heard NRNs and trade delegation from UK showing their utmost interest ... This enthusiasm from the investment community is quiet encouraging...................................Ignoring all these good news,Gyanendra Lal Pradhan, chairman of the Hydropower Development Committee at Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today has formally asked the Government to "Bailout" 28 hydro power companies.......He has blamed the following reasons for the sorry state of these 28 hydro projects ...

increasing cost of construction materials and increased interest rate are the major factors making hydropower projects costlier.

Over the last two years, the interest rate has increased by 5-7 percent points.Gyanendra Lal Pradhan, said other projects except Khimti, Bhotekoshi, Chilime and Butwal Power Company are in trouble. “The projects that started construction at an interest rate of 8 percent now have to pay as high as 16 percent interest .click here to read more

here is my take on this issues... I am not a hydro expert but I am still going to share what I think...

1. Why should the government bailout these private players?? Ok, I understand that "load shedding” is holding back our nation economic development and these private energy producers are working towards solving this national crisis,but, we need to remember that they will not be distributing free energy to Nepali jantas , we still have to buy it .... What about the moral hazard involve in bailing them out?? ? ( remember some of them have made lots of money in hydro power project license arbitrage and Initial public offering ) .......... my suggestion: Government should not give them free money,soft loans,tax incentives etc ... if private players want public money, Government owned Nepal Hydropower Company will have a equity stake in the projects, and will eventually exit through secondary market offerings .
2. Another thought…. Will it be possible for interested foreign investors and NRN to inject risk capital in these troubled projects through debt , convertibles or equity investments????......... Investing in these half or almost completed projects is less risky and less capital intensive ?? ... Good opportunity for interested investors ??? (Lets walk the talk NRNs and foreign investors)
3. or.....International Finance Corporation, commercial lending arm of the World Bank group, last month declared to invest in an average 25 million dollar per annum in Nepal ... opportunity for them ?

Taak-Tuuk-----Nepali frugal innovation

Interesting article on grass-root level innovation in Kathmandu..............

Ability to overcome scarcity by improvising products and process’ to solve customers’ problem defines the entrepreneurial spirit that lies within us Nepali jantas.Financial and material constraint of many has allowed these micro entrepreneurs/frugal engineers to create more services and products at less cost for more people . Multinationals and Universities are spending billions of research and innovation in “sustainability practices” maybe from their labs in the streets of Kathmandu, our frugal engineers can teach them thing or two on constraint base innovation................

ENERGY for all ..Investing in Nepali energy sector...

A recent report released by International Energy Agency (IEA) has some interesting facts and figures on investments and strategies required from various government agencies,multilateral institutions and private investors to reduce energy poverty. Here are some highlights from the report, that I thought was relevant to Nepal's energy crisis.

• To provide universal modern energy access by 2030, annual average investment need to average $48 million per year,more than five times the level of investment in 2009
  
• According to the report , access to electricity involves more than a first supply connection to house hold.The report claims, access to energy means - a rural household should consume a minimum of 250 KW/hr of energy per year and for urban household it is 500 KW/hr per year .
• Nepal's rural electrification program- National 3 -year Interim plan has been cited as one of the vital programs by government to improve access to electricity
• ACcess to clean cooking facilities section - Currently, after China, India,Nepal and Vietnam are the next biggest market for bio gas plan.
• Th global technical potential for hydro power generation is estimated at 145000 TWH ,more than four times current production,and host of the undeveloped potential are in Africa and in Asia,where 92% and 80% if reserves respectively untapped .
• The main obstacle to obtaining greater private sector financing, apart from uncertain investment and regulatory environments and political risks in many developing countries, is the lack of a strong business case for tackling the worst cases of energy deprivation, because of the inability of users to pay. This issue needs to be squarely faced through some form of public sector support, if there is to be a break through to universal access to modern energy. In addition, local financial institutions and microfinance institutions find it difficult to be sufficiently expert regarding new technologies and may underestimate the potential credit‐worthiness of poor households, based on the large amount they already pay for more traditional sources of energy.
  
• Understanding households’ existing energy expenditures is one important step towards unlocking end‐user finance: poor people often are able to afford the full price of modern energy because it costs less than the traditional forms it replaces, such as kerosene lamps and dry cell batteries, but may be unable to overcome the important hurdle of the initial capital cost.
• International commercial banks have an established record of financing projects in the energy sector in emerging markets, predominantly in power generation. Pricing finance at market rates according to perceived risk, they offer debt financing, mezzanine finance and, in some cases, equity. They can lend to project developers directly or to a special purpose vehicle set up to conduct the project. Commercial bank financing terms can be less onerous if certain risks are covered by guarantees from a multilateral development bank or the host government.
  
• Private sector financing sources for energy access investments include international banks, local banks and microfinance institutions, as well as international and domestic project developers, concessionaires and contractors. Private finance may also come from specialist risk capital providers, such as venture capital funds, private equity funds and pension funds. The main forms of instruments favored by private sources include equity, debt and mezzanine finance an increasingly important instrument, offered through local banks, is the extension of credit to end‐users, often with guarantees arranged in partnership with multilateral development bank...(Source:IEA,2011)

Some 57 percent households in Nepal do not have an access to toilet

According to Ramdeep Saha, the Chief of Department of Environmental Sanitation and Natural Disaster Management, only 43 percent families in Nepal have toilets.

Considering this, the government has recently unveiled a master plan on sanitation with a view to providing the people with the basic sanitation facility (toilets) by 2017.

It may be noted that the government in coordination with other organisations has been operating sanitation programmes in two districts, 232 VDCs, four municipalities, one sub-metropolis and many Click to read more