With an aim to meet the need of a dedicated infrastructure development bank in the country, Government of Nepal (GoN) and Nepal Rastra Bank paved the way for the establishment of infrastructure development bank through the Annual Budget for the Fiscal Year 2015/16 and the subsequent Monetary Policy of the same year. Accordingly, Nepal Infrastructure Bank Limited was registered under the Ministry of Industry and Commerce, Company Registrar’s Office on 8th June 2018 as the first national level infrastructure development bank of the nation, promoted by Government of Nepal together with Banks and Financial Institutions (BFIs), Life and Non-life Insurance companies, other private sector leading entities and a team of entrepreneurs.
To be the nodal financial institution of the nation for infrastructure development.
To accelerate investment in infrastructure.
To bridge the financial gap for unlocking development potential.
This marked as a significant milestone in the infrastructure sphere of the nation. The Bank obtained the operating license from Nepal Rastra Bank, the central bank of the country, on 11th February 2019 and formally started its operations on 6th March 2019. Being the first infrastructure development bank of the nation, NIFRA aims to bridge the infrastructure financing gap by raising resources from domestic and international market in the form of equity, debt, structured funds and bonds and applying such resources into economically viable infrastructure projects by adopting proven models of infrastructure financing. NIFRA also aims to work as a nodal financial institution of the nation to accelerate the investment in infrastructure sector by developing the required ecosystem, to bridge the gap in financial resources required for country’s infrastructure development, to promote the culture of Private Sector Participation in infra-projects and work closely with the Government of Nepal in planning and developing national policies for infrastructure development.
Nepal Rastra Bank (NRB) - the central bank of Nepal, has laid down the regulation specifying the sectors wherein NIFRA can invest. The investment sectors (at country level) include:
NIFRA has ‘sector prioritization’ framework based on which preferences of the sectors as well as the sectoral exposure cap is determined, and the ‘Project Screening and Selection Criteria’ framework for evaluation of project at the fundamental level.
NIFRA strives to establish itself as the nodal financial institution prioritizing in infrastructure and its allied sectors. In its journey to becoming the leading financial organization, apart from the traditional products and services, NIFRA has laid the groundwork for various initiatives, few of them are listed below:
Power Trading Company (PTC)The power trading company shall be a pioneer in starting power market in Nepal and undertaking power trading activities which include long-term trading of power generated from large power projects as well as short-term trading arising as a result of supply and demand mismatches. The company shall aim at encouraging trade of power with neighboring countries while optimally utilizing the existing resources to develop full-fledged efficient and competitive power market. It aims at fostering energy balance at fair price while contributing to the economic development of the nation.
Transmission LineThe development of transmission lines is crucial for the development of energy sector in order to balance the supply and demand mismatches and address the energy crisis of the nation. In this regard, NIFRA has initiated process for the development of transmission lines under private sector participation (PSP) which would also support cross-border electricity trade with the neighboring nations. Transmission lines are an integral part for ensuring smooth power distribution and its trade.
Commercial Blending/Blended FinancingWith an aim to becoming the forerunner for infrastructure development in the country, NIFRA also focuses on commercial blending/blended financing. Through commercial blending/blended financing, NIFRA aims at developing/supporting such projects that are economically justified but not financially viable.