IFC wants to increase portfolio in Nepal

Published On: October 25, 2016 01:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 25: The International Finance Corporation (IFC) wants to increase its portfolio in Nepal.

During a meeting with Finance Secretary Shanta Raj Subedi in his office at Singha Durbar on Monday, IFC Country Director Wendy Werner said that the IFC wants to increase its portfolio in Nepal to bring in qualitative change in Nepali lifestyle and socio-economic development.

He also urged for increased cooperation between the public and the private sector by developing private sector for infrastructure development and capacity enhancement. Likewise, financial stability, financial strengthening and financial access and inclusion are also some of the key areas that the IFC is helping Nepal, Werner said, adding that the IFC has always been in Nepal's favor for prosperity and development of Nepal.

He also discussed about the local currency bond that the Nepal government had allowed the IFC to issue in 2014. 

In April 2014, the cabinet had endorsed the IFC's proposal of issuing local currency bonds worth Rs 50 billion ($500 million) for a five-year period. The IFC had applied for the permit after the government issued a guideline in October 2013, authorizing international financial institutions to issue such bonds.

As per the government's guideline, any international financial institution with AAA rating can issue Nepali rupee bonds. The guideline has included hydropower, agriculture, road, tourism and infrastructure sectors for local currency bond issuance. The IFC has been allowed to invest the money raised through bond in hydropower, tourism and agro business.

The IFC, which has already issued such bonds in 55 countries, has to complete the $500 million bond issuance by 2018. But the prolonged political transition has delayed issuance of local currency bond.

Thanking IFC for its continued support, Finance Secretary Subedi discussed many issues including local currency bond, power development bond, transmission lines and increased investment in energy, tourism, trade and financial sector reform with Werner.

Stating that only the strong, efficient and effective private sector can attract more domestic and foreign investment, Subedi asked the IFC to help strengthen the private sector. He also asked the IFC to invest on mega projects that can help generate employment, reduce poverty and propel economic growth. 

"Since energy is the basis for economic growth, the government wants IFC to increase its investment in the energy sector," Subedi said, adding that the investment from IFC can help Nepal's strategy to achieve inclusive, high and sustainable economic development.

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