KATHMANDU: Nepal is moving to mobilize private and foreign capital for major infrastructure projects through offshore bonds, an NRN investment fund and a hybrid annuity model (HAM).

The government has authorized the International Finance Corporation (IFC) and the Asian Development Bank (ADB) to issue Nepalese rupee-denominated bonds worth up to $200 million each in international markets over the next 10 years. Proceeds can be used to finance projects developed by the private sector.

The bonds will be issued with guarantees from ADB and IFC and will be classified as non-sovereign bonds. Funds raised internationally can be channelled to private companies through Nepali banks.

The government has also opened the way for the NRN Investment Fund to mobilize capital from Nepalis living abroad. Following amendments to securities regulations, the proposed NPR 10 billion NRN Nepal Development Fund can issue up to 85% of its shares to non-resident Nepalis through an IPO.

The fund plans to invest in infrastructure, energy, tourism, agriculture and information technology, with investments ranging from NPR 100,000 to NPR 1 billion.

Meanwhile, the government is preparing to test the HAM model for infrastructure financing, with the Siddhartha Highway being considered as the first pilot project. A detailed feasibility study will determine the most suitable financing structure.

The Finance Ministry is also studying other instruments, including clean energy bonds, diaspora bonds, sovereign wealth funds, hedging mechanisms and investment funds.

Finance Ministry Joint Secretary Amrit Lamsal said the government aims to reduce reliance on conventional budgetary resources and public borrowing by linking private, diaspora and international capital with development projects.