Govt planning to set up hedge fund to attract foreign investors

Kathmandu, Jan 10: The government is planning to set up a hedge fund in a bid to facilitate foreign investors interested in investing in hydropower projects in the country. 

Earlier, foreign investors had been finding difficulty to invest in hydropower projects for want of a facility to reach power purchase agreement in US dollars.

With this, foreign investors can reach power purchase agreement in USD currency and a foreigner interested in investing in hydropower projects should deposit a certain amount into the fund for the purpose. The fund will be set up at Nepal Rastra Bank (NRB).

Minister for Energy Janardan Sharma said for setting up the fund, Energy Ministry has already sent a letter to the Ministry of Finance.

After the response of the Finance Ministry, necessary work procedure will be made in this regard in coordination with the NRB.

He said the amount deposited by foreign investors would be transacted in USD currency until the date of clearing the debt borrowed for the investment.

Usually 10 year's time will be given to clear the debt.

The fund has been established in view of the situation that economic condition of Nepal Electricity Authority had been affected severely after the power purchase agreement of Khimti and Bhotekoshi were struck in USD currency, the minister said.

A lack of such fund has also resulted in foreign investors lacking interest in investing in hydropower projects has also prompted the effort to set up this fund, he added.

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