Nepal Opens up to Public-Private Partnerships

Nepal PPP Workshop

Between the 18th?and the 20th?of July, 2022, I and my WAPPP colleagues participated in a PPP Project Marketing Workshop held in Pokhara, Nepal.??The workshop was organized by the Commercial Law Development Program (CLDP) of the US Department of Commerce and was hosted by the Government of Nepal’s Office of the Investment Board of Nepal (OIBN).???Funding for the workshop was provided by the US Department of State.??In a show of cross donor collaboration, the UK’s Foreign, Commonwealth and Development Office (FCDO) also participated in the three-day workshop.

WAPPP’s Promoting PPP Best Practices

The World Association of PPP Units and Professionals (WAPPP) was invited by CLDP to present the workshop.??Five PPP experts from WAPPP’s leadership shared their PPP insights with implementors of the Government of Nepal’s (OIBN and Ministry of Industry, Commerce and Supplies - MOICS) initiative to launch a strategic National PPP program and to attract investors. The five WAPPP representatives were Ziad-Alexandre Hayek, David Baxter, Mark Mosely, Naresh Bana, and Thibaut Morgues. WAPPP’s participation in the event was a continuation of WAPPP’s vision and mission to expose PPP Units around the world to PPP best practices that ensure that PPP procurements are competitive and transparent and that proposed PPP projects offer value for money.

Aligned PPP Visions

WAPPP’s vision is closely aligned with CLDP’s and FCDO’s visions which help countries like Nepal to strengthen their PPP procurement enabling environments, so that maximum benefits can be leveraged from development projects that are focused on countries achieving their sustainable development goals (SDGs). This objective is particularly important for Nepal which is focused on forming partnerships with the private sector to bridge its national funding gap through partnerships for economic prosperity.?

Nepal National PPP Unit

OIBN serves as the de facto PPP Unit of Nepal.??Its mission is concise and includes positioning Nepal as an attractive destination; effectively utilizing economic diplomacy to identify, reach, and attract investors; ensuing investor satisfaction; and advocatinng policy for the improvement of investment policies and systems.??Additionally, OIBN is focused on strengthening its role as a PPP center; building government institutional capacity; and establishing and strengthening coordination, collaboration, and partnership mechanisms with strategic stakeholders. All of these strategies are central to it laying a solid foundation for a national PPP program in Nepal.

OIBN is also responsible for managing the national PPP project bank which serves as its emerging PPP project pipeline.

A Pragmatic Approach to PPPs

OIBN is pragmatic in its realization that it is competing with its larger neighbors when attracting investors. This reality will require investment in its institutional resources and require building strong partnerships with the international investor and donor community.??This is why the project marketing workshop was held in Pokhara.??

A sign of how important OIBN is taking investor marketing of PPP Investment opportunities in Nepal was the active participation of its leadership in the workshop.??The CEO, Joint Secretary, and Under Secretary of OIBN attended the workshop and shared their insights on what is being done and what still needs to be done to attract investors to Nepal.??In their opening comments OIBN’s leadership stressed their four development pillars which include: project development and management; investment promotion; institutional development; and coordination, collaboration, and. partnerships.??Additional insights that were shared included: OIBN’s role in preparing feasible projects; avoiding the development of government project silos; selling of projects with clearly defined content, context, purpose, and objectives; and developing a pipeline of credible, bankable and sustainable projects. It was stressed over and over that it is important that Nepal has a PPP roadmap and credible blue prints for future projects.

Workshop??- First Day

On the first day of the workshop, WAPPP representatives shared an overview of PPP project marketing best practices.??This was followed by a lively discussion on strategies to attract investors and the need for Nepal to have an aggressive marketing strategy that acknowledges challenges and which offers enticing opportunities to investors.??OIBN also provided a synopsis of its Strategic Plan, a review of projects that it is promoting (especially in the renewable energy sector), and insights into its Investment Guide (see OIBN’s website for these documents). Of considerable interest was the discussion on how the OIBN is working on defining its roles and responsibilities; especially in regards to intergovernmental relationships between federal agencies, and between federal, provincial, and local governments. OIBN also provided insights into PPP project inclusion guidelines for its project bank (PPP project pipeline). These guidelines are comprehensive and are designed to ensure that only viable candidate projects are considered.

This session was followed by a presentation from MOICS on its role in supporting OIBN in regards to line ministry efforts to develop and implement PPP projects. After the presentations, WAPPP had the opportunity to provide insights on how to ensure that national PPP initiatives are coordinated and how national resources can be cumulatively leveraged for the common good of all stakeholders.

Workshop – Second Day

On the second day of the workshop WAPPP led a discussion on Unsolicited Proposals (USPs) and their value as a source of innovation and the challenges they face regarding ensuring competitive and transparent procurements of projects.??WAPPP stressed that USPs should never be seen as a way to circumvent existing procurement pipelines and to fast track projects. Government of Nepal participants acknowledged that USPs require considerable caution and that proving value for money requires considerable skills.?

Following this discussion, a presentation and a discussion on developing a national PPP pipeline was held.??OIBN presented an overview of its Project Bank (PPP Pipeline). This was followed by an open discussion on proposed PPP projects and the need to diversify Nepal’s sectoral approach which is currently focused on renewable energy projects, specifically hydroelectricity. The importance of completing comprehensive feasibility studies was also discussed as well as the need to develop comprehensive portfolios for future projects that would enlighten investors and address any perceptions they might have about investing in future Nepalese PPP projects.

Workshop – Third Day

On the third day, OIBN and MOICS presented candidate PPP projects that they are currently preparing. Advise was offered on the necessary scale of projects, prospective PPP models, the challenges of implementing innovative projects, financial parameters, commercial viability, standardization of technology, sustainability of projects, and the need to engage multiple stakeholders in all steps of PPP project planning and implementation. The discussion was most fruitful and WAPPP’s insights provided an international perspective into what investors look for in projects.

Overall Takeaways

The workshop was very dynamic and interactive in the sense that WAPPP was able to offer an international perspective to Nepalese PPP project proponents who are working hard to lay a solid foundation for future PPP projects.??The Nepalese participants particularly enjoyed the opportunity to ask questions and to receive real-time answers. These question and answer sessions revealed that the government is pragmatic and enthusiastic at the same time, yet it recognizes that it needs to be strategic in its approach to a national PPP program. It is also focused on improving its enabling PPP environment, it is strengthening its institutional capacity to deliver PPPs, and it is making meaningful outreaches to potential private sector partners and stakeholders.??

OIBN, as the de facto PPP Unit, is also refining its mission so that it can play a meaningful role in marshaling the public sector resources of Nepal for an effective launch of a national PPP program that is sectorally diverse and which offers feasible and economically viable projects to investors.?

On the final day of WAPPP's mission to Nepal a meeting was also held with the Prime Minister of Nepal to share insights on the workshop and prospects for PPPs. The interest shown by the Prime Minister's office is an. strong indication that Nepal is an emerging PPP market that investors should take note of.