China becomes largest FDI contributor in Nepal

KATHMANDU - China has become the largest foreign direct investment (FDI) contributor in Nepal during the first six months of the current fiscal year (mid-July to mid-December), a fresh government report said.

The report released by Department of Industry (DoI), the government agency that permits and registers FDI in Nepal, last week said during the study period, investors from China alone provided investment worth 17.41 billion Nepalese currency ($174 million), more than 60 percent of?the total FDI?the poor Himalayan nation received in the last six months.

The country received FDI commitment worth 26.98 billion Nepalese currency ($269 million) during the review period.

During the same period in the last fiscal year, Chinese investors had committed FDI equaling to 5.50 billion Nepalese currency ($55 million) in Nepal.

Investment from China has begun to surpass the investment from India, which till fiscal year 2011-12 was the largest FDI contributor in Nepal.

"The Chinese investors had always desired to expand their investment in Nepal. However the political scenario in the past discouraged them," Dhruba Lal Rajbanshi, director general at DoI told Xinhua on Wednesday.

"As the political course took positive shape following the Constituent Assembly election, the Chinese investors have introduced huge amount of FDI," he said.

DoI data shows that when Nepal in the past lacked investment friendly environment, Chinese investors had been bringing in their money in micro projects including, resorts, language center, organic farms or software firms that would require low budget.

"During that time Chinese investors were in wait and watch mood. Now when the industrial environment has changed for better, they have been introducing large scale projects that require lots of investment," added Rajbanshi.

According to the report, of the total investment, the Chinese investors brought in hydro power sector accounts for more than 90 percent. The investors have proposed to pour in 16.21 billion Nepalese currency ($162 million) in the hydro power sector alone.