Doing business in Nepal was never easy. We should know – we’ve been doing Impact Investments here for eight years. Political instability, poverty, lack of scale, and a foreign aid sector that sometimes crowds out private sector potential are just some of the factors that make doing business in Nepal challenging. But the growing optimism in the air has led us at the Dolma Development Fund to an important announcement.
As I look beyond the haze of the Kathmandu Valley, the dazzling sheen of Himalayan peaks reminds me of the gifts with which this nation is blessed – eight of the world’s ten highest mountains, enough hydropower potential to power itself and much of South Asia, and a patchwork of smiling cultures and religions that are a wonder of humanity.
A number of factors are converging to bring Impact Investment to Nepal. Peace has held since 2006 following the Maoist rebellion. This has brought sustained economic growth and soaring FDI inflows growing at 27% p.a. (CAGR) since 2006. There are opportunities in all our industry sectors – ecotourism, education, healthcare, water, renewables, ICT, and agriculture. In many sectors, lack of supply and pent-up demand drives high prices for poor quality, thus creating opportunities for nimble SMEs to benefit from the imbalance. But they still lack the capital, technology, and management skills needed.
The government is improving too. The Prime Minister has garnered a modicum of cross-party respect. The new Nepal Investment Board, headed by respected banker Radhesh Pant, has been established as a one-stop shop for inward investors. Aid agencies are focusing more on stimulating commercial growth. DfID in particular has embraced the private sector as core to its strategy. IFC recently announced that it intends to increase its investment in Nepal to USD $100-200m. And many grass roots organizations, such as ChangeFusion Nepal and Project Gazaab, are giving a boost to the entrepreneurial ecosystem.
In this environment the world has an opportunity to look again at Nepal. We are delighted to announce the launch of Dolma Impact Fund I – the first impact fund ring-fenced for Nepal. Perhaps this is the beginning of a more sustainable Nepal.
– Tim Gocher, Chairman, Dolma Development Fund, http://www.dolmafund.org/