The path for this mega-fund was cleared following the recent passage of the 'Alternative Development Finance Mobilization Bill, 2083' by the Federal Parliament. The initiative aims to mobilize internal savings and insurance market capital into mainstream development, ultimately reducing Nepal's heavy reliance on foreign loans.
Key Highlights of the Fund
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Capital Structure: The fund will start with an initial paid-up capital of Rs 25 billion. Ownership is split between:
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Investment Scope: It will target 16 priority sectors—including hydropower, transmission lines, roads, tunnels, railways, and information technology.
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Minimum Threshold: The fund will strictly focus on large-scale, transformative projects with a minimum investment threshold of Rs 1 billion, providing financing through both equity (self-capital) and debt.
Global Talents & Asset Monetization
To ensure international standards of professionalism, the government has opened the door for global leadership. Foreign citizens or Non-Resident Nepalis (NRNs) holding foreign permanent residency (PR) who meet the qualifications are eligible to be appointed as the Chief Executive Officer (CEO) for a 4-year term.
Furthermore, the fund—chaired by the Finance Secretary—has been granted advanced financial maneuvers, including:
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Asset Monetization: The right to raise capital for new projects by monetizing existing government project assets.
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Foreign Forex Risk Management: The ability to issue bonds, secure foreign loans, and offer hedging facilities in coordination with the Nepal Rastra Bank.
Tapping into Diaspora & Remittances
To channel the wealth of Nepalis working abroad, the trust will establish two specialized sub-funds:
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Sovereign Diaspora Fund
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Remit Fund
These funds will specifically target investments from Nepalis in foreign employment, Non-Resident Nepalis (NRNs), and foreign citizens of Nepali origin, integrating remittance directly into national nation-building projects.
