Bill to establish alternative development finance funds registered in parliament

KATHMANDU: A bill to establish the Alternative Development Finance Mobilisation Fund-2025, with an authorised capital of Rs 100 billion and a paid-up capital of Rs 25 billion, has been registered in Parliament. The Fund will focus on infrastructure development investments.

The bill aims to create a legal framework for exploring both domestic and international funding sources, identifying and prioritising investment projects, and facilitating investments in those projects.

Registered in Parliament last Friday, the bill seeks to establish legal provisions for alternative development by ensuring the effective use of fiscal instruments, including domestic and foreign investments, while addressing institutional structures to support these efforts. It also emphasises the need for monitoring and evaluation mechanisms.

According to the Ministry of Finance (MoF), the bill is intended to manage resources for overall economic development effectively through alternative financing methods, such as bonds, equity funds, and other financial instruments.

The Alternative Development Finance Mobilisation Fund will be an autonomous body. The bill proposes that the Government of Nepal will hold a 51% share in the Fund. "The government has to invest Rs 12.75 billion, which is 51% of the paid-up capital of Rs 25 billion of the Fund," the bill states.

The bill further states that a policy of gradually reducing the government’s share should be adopted once the entity becomes strong and self-sufficient through its effective use.

It outlines that alternative development finance will be directed towards projects providing high economic returns, creating more employment opportunities, or contributing to the country’s economic development. Possible sources for raising such investments are also mentioned in the bill.

This alternative development finance fund can also be used for constructing and operating infrastructure such as information technology parks, special tourism infrastructure, special sports infrastructure, urban infrastructure, digital infrastructure, cable cars, ropeways, and podways.

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