FDI in Nepal’s Infrastructure and Construction Sector

Foreign Direct Investment (FDI) in Nepal’s infrastructure and construction sector. Nepal has been actively seeking foreign investment to boost its infrastructure development.

1. Permissible Industries for FDI:
Foreign investment in Nepal is allowed in various sectors, subject to certain conditions and FDI limits. The categories of permissible industries include but are not limited to Infrastructure and Construction: This category encompasses transportation, energy, water supply, and urban development projects.

2. Electricity Sector (Hydropower):
The electricity, gas, steam, and air conditioning sector, particularly hydropower, has been a preferred sector for FDI in recent years. According to the latest survey, 32.8 percent of FDI stock and 41.8 percent of total paid-up capital are in this sector.

3. Other Notable Sectors:
In addition to hydropower, much of Nepal’s FDI inflow has gone into three other sectors:
Manufacturing, mining, and quarrying (28.3%)
Financial intermediation (27.3%)
Electricity, gas, and water (27.5%)

Nepal’s infrastructure development presents significant opportunities for foreign investors, especially in the energy and transportation sectors. As the country continues to prioritize sustainable growth, attracting FDI remains a crucial strategy for achieving its development goals.