Nepal loses huge Saudi investment to political instability
KOSH RAJ KOIRALA
KATHMANDU, Nov 9: The ongoing political instability and uncertainty arising from the failure of the political parties to promulgate new statute has put off potential investors from making investments in Nepal.
A case in point is a group of private investors from Saudi Arabia who were keen to invest US $ 2,200 million in agriculture, hydro power, tourism and drinking water sectors in Nepal, but decided against it in the end. The investors have instead decided to channel their funds to Sudan and Egypt.
Nepalese Ambassador to Saudi Arabia Udaya Raj Pandey, who is currently in Kathmandu on a leave, said the investors were planning to visit Nepal in mid-June as they had hoped that Nepal would have a new statute by May 27.
“But they have gone to Sudan and Egypt after the Constituent Assembly was dissolved without promulgating a new statute,” he said. The investors had planned to make a feasibility study in the four different areas and hoping to invest US $ 550 million in each of them. “But the political uncertainty has cost us that opportunity,” he added.
He informed that not just the private investors of the Gulf nation, but the Saudi government itself has shown willingness to help Nepal in various areas by providing it soft loan as well as grants. The Saudi government in April announced to provide Rs 11 billion to Nepal as a soft loan to develop and promote irrigation, hydropower and vocational trainings in Nepal.
Pandey, the Nepali envoy who assumed office some 14 months ago, said Nepal can solicit more support from Saudi Arabia if the soft loan projects are implemented effectively. “It all depends whether we will be able to implement those projects successfully. There is a huge prospect of bringing in more aid from Saudi Arabia,” he said.
As part of the Saudi Development Fund, the Saudi government had provided Rs 930 million to Nepal in soft loan some 23 years ago to implement the Bagmati Irrigation Project.
But since then there has been no such support to Nepal as the irrigation project was not implemented effectively.
Saudi Arabia is one of the major labor destinations for Nepali migrant workers. It is estimated that some 600,000 Nepali workers are currently working in Saudi Arabia.