Nepal's Investment Board CEO Highlights Critical Gap Between Approved and Implemented Foreign Investment

Nepal's aspirations for robust economic growth, fueled by foreign direct investment (FDI), face a significant hurdle: a substantial disparity between approved investment pledges and their actual realization on the ground. This critical issue was brought to light by Ms. Yanki Ukya, Chief Executive Officer of the Investment Board Nepal (IBN), during a recent session of the National Assembly's Development, Economic Affairs, and Good Governance Committee. Her remarks underscore a pressing need for systemic reforms to translate investor enthusiasm into tangible economic benefits.

Ms. Ukya emphasized that while foreign investors exhibit considerable interest and eagerness to invest in Nepal, the effective implementation of approved projects remains a persistent challenge. Over the past 14 years, the IBN has approved investments totaling approximately NPR 1.67 trillion (later clarified as 1.6 trillion). However, a comprehensive study is urgently required to ascertain how much of this approved capital has genuinely flowed into development projects and generated employment opportunities. The CEO highlighted a significant chasm between the volume of approved investment and the capital that ultimately reaches the implementation phase, stressing the imperative to link approved investments directly to job creation and increased national production.

The IBN CEO identified several key sectors that continue to attract foreign investor interest, including tourism, hydropower, information technology, and chemical fertilizers. These sectors represent vital pillars for Nepal's economic diversification and sustainable development. Despite this keen interest, investors frequently encounter formidable obstacles, primarily stemming from lengthy and cumbersome approval processes. Navigating the myriad stages of project development—from initial approvals and licensing to coordination with various government bodies, implementation, and eventual transfer—often proves to be a deterrent, creating an environment of uncertainty and inefficiency.

In response to these challenges, Ms. Ukya outlined the IBN's proactive efforts to transform itself into a more effective "delivery unit," with a sharpened focus on project implementation. She stated that the Board is actively working to streamline processes and enhance coordination among all relevant stakeholders to ensure that approved investments translate into productive ventures and contribute meaningfully to the national economy. This strategic shift aims to foster an environment where foreign capital can be deployed efficiently, thereby maximizing its potential for job creation and royalty generation for the state.

Currently, the Investment Board has five projects in various stages of study and evaluation, with three projects already operational. This pipeline, while promising, underscores the need for accelerated conversion of proposals into active projects. Ms. Ukya also suggested a critical review of the Investment Board's existing structure to better align it with its mandate of facilitating and expediting investment. Effective inter-agency coordination is paramount, she noted, to bridge the gap between policy formulation and practical execution, ensuring that the nation fully capitalizes on the expressed interest of global investors.

The disparity between investment approval and implementation is not merely an administrative bottleneck; it represents a significant missed opportunity for Nepal's economic advancement. Addressing this gap is crucial for attracting further FDI, stimulating economic activity, creating much-needed employment, and ultimately fostering sustainable development across various sectors. The IBN's renewed focus on becoming a delivery-oriented entity, coupled with proposed structural reforms and enhanced inter-agency collaboration, offers a pathway towards unlocking Nepal's full investment potential and translating investor enthusiasm into tangible national prosperity.