MP Lima Adhikari Stresses Need for Alternative Financial Sources for Nepal's Infrastructure Development

Kathmandu. Ruling Rastriya Swatantra Party MP Lima Adhikari has stated that traditional government budgets are insufficient for Nepal's infrastructure development and that the mobilization of alternative financial sources should be emphasized.

MP Adhikari expressed this view while speaking at a program organized by the Nepal Economic Journalists Association (NEFEJ) on the topic 'Challenges of Electrical Infrastructure Construction and the Way Forward'.

MP Adhikari mentioned that the government has set an ambitious goal of generating 30,000 megawatts of electricity and constructing 30,000 kilometers of roads in the next 10 years. She pointed out that the main challenge is the construction of transmission lines and substations to deliver the generated electricity to consumers and industries. She argued that it would be difficult to meet the development goals with an annual capital allocation of around 400 billion rupees, of which only 40 percent is spent.

• Strategy for Mobilizing Domestic and External Resources

She informed that the government is exploring both domestic and external sources to raise investment in the infrastructure sector. She stated that the government plans to invest the trillions of rupees lying with institutions like the Employees Provident Fund, Social Security Fund, and Citizen Investment Fund at low interest rates in productive infrastructure as domestic resources.

Informing that the 'Alternative Finance Bill' was recently passed by the House of Representatives to attract foreign investment, MP Adhikari said that financial instruments such as various thematic bonds, offshore bonds, project bonds, and sovereign wealth bonds will be used under this. According to her, homework is also being done on issuing offshore bonds in Nepali currency with the support of the Asian Development Bank (ADB).

She said, 'We have set a goal to generate 30,000 megawatts of electricity, construct 30,000 kilometers of roads, and expand industrial infrastructure in the next 10 years according to the promises and agreements made with the citizens. However, today's main challenge is not production itself, but the rapid development of transmission lines, substations, and distribution infrastructure required to deliver the produced electricity to consumers, industries, and businesses.'

She added, 'For this, the traditional budget system or the government's resources alone are not sufficient. Therefore, the government has advanced a strategy to mobilize domestic and external financial resources outside the government budget.'

• New Financial Instruments and Preparation for 'Sunset Law'

She mentioned that the parliamentary finance committee is holding intensive discussions with the National Planning Commission, the Securities Board of Nepal, and the Nepal Rastra Bank for the legal and procedural implementation of new financial instruments.

MP Adhikari said, 'The Alternative Finance Bill has already been passed by the House of Representatives for mobilizing external resources. The government's goal is to attract investment in the hydropower and infrastructure sectors by using offshore bonds, project bonds, thematic bonds, and other modern financial instruments through this.'

Highlighting the effective implementation of these financial instruments as another important challenge, she informed that discussions are ongoing between the finance committee, the National Planning Commission, the Nepal Rastra Bank, and the Securities Board regarding the necessary legal and procedural arrangements. Furthermore, she stated that the government has also committed to soon introduce a 'Sunset Law' to further encourage investment in the energy sector.