IFC asks govt to bring guideline on rupee bonds | Business

IFC asks govt to bring guideline on rupee bonds | Business

With Local capital already limited,and volatile exchange rate is this a good option ?

IFC concerned about NEA’s dilly-dallying over PPA | National | Business

IFC concerned about NEA’s dilly-dallying over PPA | National | Business

"Lower Solu Project Director Ashish Garg said the MoE and NEA have been postponing the PPA signing date, citing the lack of budget for the construction of transmission lines. Issuing the licence to these projects, the government had pledged to construct the transmission lines.

The projects have paid a combined Rs 450 million in licence fees and have provided bank guarantee worth Rs 101 million. NEA Managing Director Rameshwor Yadav also said the NEA has not been able sign the PPA due to the possibility of wastage of energy during monsoon after a few years."

Lower Solu in the past has gained lot of attention from  Development Finance Institutions (DIFs) for investments...NEA being  reluctance will not send a good signal to potential foreign investors...... 

Small Hydro Power and Venture Capital in Nepal

A recent published white paper from Alternative Energy Promotion Center (AEPC) mentions the need  of venture capital/ equity investment to ease the access to finance situation in the small hydro power segment...

This is what is mentioned in the white paper :- "

Assistance in Raising Equity and loans

  "Local community/developer need to be assisted/supported in equity and loan, equity investment, venture capital investment fund, long term soft loan etc.

Venture Capital system should be established. A study on how venture capital provision may be introduced in Nepal including long term soft loan and equity investment."

The white paper mentioned "  A study on how venture capital provision may be introduced in Nepal " My recommendation is to cover the following issues in the study  

• Quality of deal flow- Not  just " Jhola ma Khola" 
• Issue involving cost of capital, considering floating interest rate 
• Taxation issues, tax incentives 
• Lock in period 
• Exit options & incentives while exiting for venture capital investors
• Financial instruments that can be used 
• Possibilities of   patient capital, including first loss option 
• Environmental, social and governance risk 

Contact me for additional thoughts and comments 

Cement Industry in Nepal

1. "Nepali cement is meeting only 75 percent of domestic demand, according to the Cement Manufacturers Association of Nepal. Cement and clinker worth Rs 4.53 billion have been imported in the first nine months of the current fiscal year, according to the Trade and Export Promotion Center. Cement is imported from India and the big development projects in Nepal are using imported cement. " 
2. "Entrepreneurs claimed that the projects are buying foreign cement due to the waiver in customs duty and value-added tax (VAT) while importing construction material for the national priority projects."
3. According to the Cement Manufacturers Association of Nepal (CMAN), the domestic cement industry has an installed production capacity of 5.58 million tonnes annually which is slightly higher than the annual demand of 5.42 million tonnes. However, cement manufacturers say their plants could have utilized their full capacity except for supply side constraints and government apathy.
   
   However, this hasn’t stopped the private sector from entering this sector in a big way. Currently, there are 42 factories in operation producing 3.90 million tonnes of cement annually. Local production fulfils about 72 percent of the requirement and the rest is met by imports from India. Nepal produces OPC, PPC and PSC cement, of which OPC is preferred these days.
   
   Out of the 42 factories, only 10 also produce clinker, a major raw material used in cement production. Nepal used to depend on India for 90 percent of its clinker requirement. However, with more factories now setting up clinker production units after acquiring limestone quarries, imports from India will decline in the coming years.
   
   With these upcoming projects and capacity enhancement at a number of existing cement factories; the country will be able to substitute around 80 percent of its cement imports from India within the next few years.
4. The Bureau of Standards and Metrology reasoned that the big projects cannot trust domestic cement as the majority of manufacturers take permission for one brand and produce another. Only 22 cement factories have obtained Nepal Standard (NS) mark from the bureau till now.

Source: KP,Karobar,THT
Here is an excellent report on Nepali cement industry analysis. 

Our Analysis in of the cement industry in Nepal 

• Foreign Investors and Foreign contractors operating in Nepal prefer high quality cement, mainly imported  from India. They simply do not trust quality of cement made in Nepal. With increasing foreign Investment in Mega Hydro projects, investing in  cement factory producing high quality cement will be a viable options for the  potential investors. 
• Valuation of a cement company: If a potential investor is planning to buy an existing cement company, the investor should not may more than NPR 5000 per tone.... 

For more analysis-contact us

CDC's Frontier Investment strategy might also focus in Nepal

This is what there website say

"In its initial phase, the team will focus on a small number of geographies such as Northern Nigeria, South Sudan, Nepal and Myanmar. The Frontier Investments team will complement the strategies of CDC’s four core investment teams and may provide capital in all its forms. - See more at: http://www.cdcgroup.com/How-we-do-it/Types-of-capital/Frontier-investments/#sthash.EuPFtaW8.dpuf

Millionaire Shesh Ghale for commercial investment fund & social Investment Fund

"My focus would be on increasing capital investment and welfare activities in Nepal. Reviewing past work, I will continue the existing agenda of the NRNA. I have planned concentrating on two agendas—commercial investment and social investment funds. The commercial investment fund will be mobilised for the country’s economic development, while the social fund will be mobilised for charity work or to help the underprivileged people." click here to read more 

Investor confidence reaches new high as Chitwan tourism rebounds | Business

Investor confidence reaches new high as Chitwan tourism rebounds | Business