KATHMANDU, May 29: The government has announced plans to establish a sovereign wealth fund by mobilizing a portion of Nepal’s foreign exchange reserves as part of a broader strategy to transform the country into a regional technology and innovation hub.
Presenting the budget for the Fiscal Year (FY) 2026/27 in the joint meeting of the federal parliament on Friday, Finance Minister Dr. Swarnim Wagle said the government would prioritize artificial intelligence (AI), clean energy, digital infrastructure and financial sector reforms.
The government plans to issue “Clean Energy Bonds” and “Diaspora Bonds” to maximize the use of climate financing and investment from Nepalis living abroad.
Dr Wagle said a certain percentage of the country’s adequate foreign currency reserves would be mobilized through a sovereign wealth fund. The budget also proposes establishing a “Motherland Fund” to invest in strategically important projects, including fuel storage facilities capable of maintaining at least 3 months of reserves and AI-related infrastructure, such as AI factories.
Wealth Management
To reduce exchange rate risks in projects financed through foreign loans or investments, the government announced that hedging services would be made available from the next fiscal year.
The government also pledged to intensify efforts to remove Nepal from the Financial Action Task Force’s grey list and improve the country’s sovereign credit rating by creating a favorable economic environment.
As part of public enterprise reforms, the government said it would increase state investment in Rastriya Banijya Bank and restructure Nepal Airlines Corporation into a company model with strategic partnerships. Shares of Rastriya Jeevan Beema Company and Bishal Bazaar Company will also be issued to the general public.
The government further reiterated its plan to retain a 66 percent stake in Nepal Telecom while selling the remaining shares to the public by mid-January. Funds raised from the sale will support Nepal’s transformation into a technology hub.
To expand the information technology sector, the government said it would ease overseas investment provisions for Nepali citizens and introduce a clear legal framework allowing people in Nepal to work remotely for foreign employers.
The budget also proposes centralized procurement of information technology software used by government agencies through a single authority.
Under digital public infrastructure development, a fintech marketplace will be established under the supervision of Nepal Rastra Bank, while additional government services will be integrated into the Nagarik App.
The government also announced plans to establish the country’s first sovereign AI compute center in Kathmandu. Thousands of AI processing units will be procured to provide subsidized computing capacity to AI entrepreneurs and startups.
In addition, at least 15 internationally recognized Nepali AI researchers will be invited back to Nepal through prestigious fellowship programs to contribute to the country’s technological development. The government said it would also prioritize academic development in mathematics and other AI-related subjects.
