NEPAL > Nepal Investment Board Approves $400 Million FDI in the Cement Industry
Source: The Himalayan Times (November 22nd, 2014)
KATHMANDU: As the board meeting of Investment Board Nepal (IBN) has approved the foreign direct investment (FDI) proposal of Reliance Group for an investment of $400 million in a cement plant and limestone mines, IBN has said that it will inform the investor at the earliest about the ‘go-ahead’ from Prime Minister-led board.
“The Reliance Group is interested in establishing a factory in the eastern or central Tarai, and the board’s approval of the FDI has paved the way to start feasibility study and other groundwork here,” Radhesh Pant, chief executive officer of the IBN told The Himalayan Times. While the Department of Industry is the authorised body in approving FDI of less than Rs 10 billion, mega projects that draw in anything more than that requires a go-ahead from the IBN.
Reliance Group — led by Indian billionaire Anil Ambani — had proposed $400 million investment in the cement plant some three months ago.
As cement factories are mushrooming in the country, large-scale FDI from multinational firms like Reliance Group and Dangote Group of Nigeria have also been attracted towards the cement industry.
The IBN approved the FDI of Dangote Group worth $800 million in November last year. Dangote and Reliance are the major foreign investors in the cement industry, receiving approval within a year’s time and the projects are expected to harness Nepal’s potential in cement production and establish the country as a cement exporting nation in the long run.
There are altogether 42 cement plants run by local manufacturers in operation at present, with total annual production amounting to four million tonnes. The government has been facilitating cement factories by constructing access roads between the plant and mines and providing electricity grid connection facility.
Meanwhile, the IBN board also decided to ask request for proposal (RfP) from among the shortlisted firms to conduct the feasibility study of setting up a chemical fertiliser plant in the country. Five firms were shortlisted, and the IBN had invited expression of interest (EoI) for the purpose in the first week of September. The firms shortlisted as per their EoI are SILT Engineers and Consultant Nepal in association with Tata Consulting Engineers (Mumbai); Jacobs Consultancy in association with Taylor-Dejongh and Ever Sheds (United Kingdom); Saipem SPA (Italy); Projects and Development India in association with Feedback Infrastructure Nepal; and Infrastructure Development Corporation (Karnataka), according to IBN. IBN will award the contract to one firm among them after reviewing the RfP.
