Potential hydro investors will attend London meet
Jan 25, 2017- The year 2016 marked 200 years of establishment of diplomatic relationship between Nepal and the UK. In the last two centuries, the British government has supported Nepal to strengthen social sector, attract foreign investment and meet various development goals. To further deepen the partnership between Nepal and the UK and explore investment opportunities in Nepal, Andrew Parmley, the 689th Lord Mayor of London, who is regarded as the financial services ambassador for the whole of the UK, recently visited the Himalayan republic. In an interview with Rupak D Sharmaof The Kathmandu Post, Parmley discussed possible areas of cooperation and ways Nepal could attract British investment. Excerpts:
What was the main purpose of your visit to Nepal?
My job involves a lot of travelling. This year I’d be visiting over 30 countries across the globe to promote financial, professional and business services that the City of London provides. I’m very delighted that I had the opportunity to visit this beautiful country very early on in my tenure. Nepal is a fascinating country which I had never visited before. So far, only one Lord Mayor has visited this country; and that was 20 years ago. Since that time a lot has changed. What we now see is a country full of optimism and with an interesting development programme. And the City of London wants to take part in Nepal’s development process.
You just visited some of the hydroelectric project sites in the country’s eastern part. What do you think of the prospects of hydropower sector in Nepal?
I visited Mai Khola and Middle Tamor hydroelectric project sites. Projects like these not only generate electricity, but serve locals by providing education and healthcare services. These projects also help share prosperity by extending shares to locals. In a world which is increasingly becoming polluted, where we worry about climate change, hydroelectric projects are providing clean, renewable energy. Nepal has huge potential for growth in this area, and the UK would like to assist in that growth. This will not only make Nepal self-sufficient in electricity, but enable it to export surplus energy. This will be the start of a new era of prosperity for Nepal.
Lately, debt and equity, by and large, are the most popular financial instruments used in construction of hydro projects in Nepal. Can London, being the world’s financial centre, help Nepal devise other financial instruments to build these projects?
The City of London is the world’s top centre for financial services, which also helps people to devise instruments to raise finance. Sometimes we use complex instruments and sometimes we use a straightforward instrument like loans. The important thing here is that there is a great interest in renewable and green energy in London. So, on March 22, I’m convening a conference in Mansion House in London, which will be attended by potential investors, who wish to invest in hydroelectric projects in Nepal. So, we are ready to assist Nepal.
Who will be attending the conference being held in London?
We have an extensive list of people who are interested in development opportunities. I’m not going to name any name, but there are lots of people who are interested in this conference. The City of London has been promoting green finance initiative and there are people with budget who want to invest in hydroelectric projects, which are one of the best sources of clean energy.
What other investment areas can Nepal and the UK explore together, apart from hydroelectric?
London is also the global centre for financial technology, known as fintech in short, and is working extensively on prevention of cybercrime. In the UK, the incidence of cybercrime has surpassed any other crime. And I’m not just talking about people hacking into your bank account, but people turning off all the traffic lights or disabling ATMs. So, as we become technologically advanced, we have to become aware of its dangers as well. Also, fintech is an industry in which geography doesn’t matter. And there is no reason why fintech experts should not set up base here in Nepal. So, this is another area where we can work together.
As you know Nepal’s capital market is still in its infancy and use of fintech can deepen it. Have you been exploring possibilities of partnership in this area?
Many aspects of Nepali lives are in a nascent stage, which is to say they are gradually developing. This does not apply only to financial matters but all sorts of things, such as foreign policy, energy, industry, education, etc. But ‘Rome wasn’t built in a day’. So, it’ll take some time for changes to be seen. And we are your financing friend to support you in that endeavour.
What should Nepal do to expedite this process?
Several things need to be in place. First is stability, which is gradually coming into focus here and we welcome that very warmly. Second is passage of anti-corruption bill. Also, some of the major infrastructure projects, such as hydroelectric and metro, need to be completed. We’d like to see some success in the area of infrastructure development, because success breeds success. And few successful outcomes can open floodgates for investors in the City of London to invest in Nepal. Once investors come in, financial instruments will also follow. But to encourage more British investors to come to this country, we are also discussing the issue of signing double-taxation avoidance treaty with Nepal. We need to sign this as quickly as possible, and we’ve brought this matter up during our meetings with government ministers.
Is double-taxation avoidance agreement a precondition for entry of British investors to Nepal?
There is no precondition when it comes to partnership with the UK. All we are looking for are stability and measures to fight corruption. But signing of double-taxation avoidance treaty will provide strong indication that Nepal means business. This could help Nepal attract more British investors. Also, the legal system should be efficient here and the process of getting money into and out of the country should be quick.
Some of the foreign investors complain about delay in repatriation of dividend. Is this bothering British investors as well?
On my arrival, I heard complaints about difficulties being faced by foreign investors in getting money out of the country. A day later, when I talked to a banker, he said there was no problem at all. So, it depends on who you’re talking to. From what I know, those who complete all paperwork do not face problems in taking money out of the country.
Nepal and the UK are also trading partners. But Brexit has started creating confusions among exporters here, as the UK still has not come up with a clear-cut trade policy. Would you like to discuss this issue?
The City of London’s position on Brexit has never changed. And don’t forget we are not politicians, we are only here to represent the financial services sector. Since the Brexit, the City of London has been lobbying with Parliament for a number of things, such as access to the single market of some form, access to talent from across the globe, and stability and reassurance for overseas nationals living in the UK and British nationals living in Europe. These proposals were incorporated in the 12-point package launched on Tuesday by the British Prime Minister to start negotiations on Brexit with the EU. This tells me that the prime minister is listening to the City of London. Besides, the City of London has been constantly reinventing itself. In 1666 when a great fire gutted the city, many said London would never trade again. But within two years we emerged as bigger and better traders. So, I’m not worried about Brexit, but we have to put mechanisms in place to be able to continue to trade with Europe and everyone else.
Lastly, lots of radical voices were heard during the run up to Brexit vote. Do you think Nepalis living in the UK have anything to fear about?
The British prime minister has made it clear that this is not going to be a thing of concern. We’re delighted that 150,000 Nepalis have chosen to make London their home. And they have nothing to worry about. So, they are completely safe.