Nepal’s Finance Minister Pushes Alternative Financing for Infrastructure & Economic Growth

27th April 2025, Kathmandu

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has stressed the urgent need for alternative development financing to ensure long-term investment in sustainable economic growth and infrastructure projects across Nepal.

Nepal’s Finance Minister Pushes

Presenting the Alternative Development Financing Mobilization Bill in the House of Representatives, Paudel highlighted the critical role alternative financing will play in bridging Nepal’s investment gap.

Why Nepal Needs Alternative Development Financing

Nepal’s infrastructure sector is facing a major financing shortfall. Despite the growing need for modern infrastructure—fueled by global competition, climate change, and rising citizen expectations—annual infrastructure investment in Nepal remains between NPR 200 to 300 billion, far below the required levels.

Studies reveal that Nepal will need more than NPR 100 trillion in investments over the next decade to meet national development goals. Finance Minister Paudel emphasized that new sources and innovative financing mechanisms are necessary to fill this investment gap and drive sustainable development.

Key Features of the Alternative Development Financing Bill

The newly introduced bill aims to:

• Identify and prioritize key infrastructure sectors and projects.
• Mobilize internal resources and attract foreign investments.
• Promote the effective use of various financial instruments.
• Establish a strong institutional framework for monitoring and evaluation.
• Create new employment opportunities through strategic investment.

Paudel also noted that the bill provides a legal foundation to support national priority projects, addressing the financial resource constraints Nepal currently faces.

Major Investment Areas Identified

Aligned with Nepal’s long-term national goals outlined in the 16th Plan, the government seeks significant investment in:

• Electricity production, transmission, and distribution upgrades.
• Development of industrial zones and special economic zones (SEZs).
• Smart city and urban development projects.
• Tourism infrastructure projects.

Road networks, irrigation systems, drinking water supply, and airport construction.

Finance Minister Paudel had already approved operational guidelines related to alternative financing during his previous tenure in Asar (June–July), setting the stage for today’s legislative action.

Nepal’s Future with Alternative Development Financing

With the proper mobilization of alternative development finance, Nepal can accelerate infrastructure development, drive job creation, and ensure economic resilience. The government’s proactive approach aims to open up new investment opportunities, positioning Nepal as a competitive player in the regional and global economy.

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