KATHMANDU, May 18: Nepal and Bhutan are holding joint-secretary level trade talks on May 24-25 in Thimpu, aiming to promote bilateral trade and share experiences and best practices in hydropower and tourism sectors.
“We are exploring the possibility of expanding our exports to the South Asian neighbor,” said Toya Narayan Gyawali, joint secretary at the Ministry of Commerce and Supplies (MoCS), who will lead Nepali in the talks.
The ministry is presently consulting with traders and exporters to give the final touch to its trade agenda. Nepal presently enjoys comfortable trade surplus with Bhutan.
Apart from trade, the Nepali officials will also seek to learn from Bhutan´s experience in attracting foreign investments in hydropower and tourism sectors. Nepal at the moment is suffering from severe energy crisis, which has affected economic activities at a time when the nation is celebrating Nepal Tourism Year 2011.
The two South Asian neighbors have no formal bilateral trade agreement. However, both the countries are signatories to the South Asian Free Trade Area (SAFTA) -- a regional trade agreement that aims for intra-regional trade growth through easy mobility of goods among member countries.
Bhutan has emerged as a potential export destinations for Nepal. Nepal enjoyed all time high trade surplus of Rs 1.42 billion with Bhutan in 2009/10. According to MoCS, Nepal exported goods worth Rs 1.55 billion to Bhutan during the period. Its import stood at Rs 133 million.
Nepal´s exports to Bhutan in 2008/09 stood at just Rs 194 million, whereas import from the Druk kingdom was recorded at Rs 352 million. Exports to Bhutan made up around 3.5 percent of the country´s total exports to SAARC countries in 2009/10. Nepal´s total exports to SAARC countries during the fiscal year stood at Rs 45 billion.
Nepal has been exporting industrial products, such as electricity transformers, noodles and handicrafts to Bhutan and importing fruits, tomatoes and other agro-based products from there.
Experts say Nepal should utilize the trade talks to learn from Bhutanese experience in hydropower and tourism sectors. “Bhutan has made tremendous progress especially in the hydropower sector, which has become a key to the growth in export-based industry there. We can hold talks with Bhutan for exporting electricity to the power-starved Bangladesh,” said Gyanedra Lal Pradhan, hydropower expert.
Surendra Bir Malakar, immediate past president of Nepal Chamber of Commerce, also said Nepal should explore the possibility of exporting agriculture goods, handicraft and other products to Bhutan.
Thursday, May 19, 2011
Banks are safe:Governor Khatiwada
KATHMANDU, MAY 18 -
Governor Yubraj Khatiwada on Wednesday said main indicators of banks and financial institutions (BFIs) are in a satisfactory state. According to Khatiwada, capital adequacy ratio, non-performing loan, liquidity and credit to deposit ratio are sound.
The governor’s statement has come at a time when bad corporate governance has hit the country’s financial sector.
According to the central bank, commercial banks’ capital adequacy ratio and non-performing loan (NPL) level are at 13 percent and 2 percent, respectively, and the credit-to-deposit ratio (CD Ratio) stands at 81 percent. “All these indicators show that banks are in a sound health. Therefore, banks are safe,” said Khatiwada at a press meet here.
Khatiwada admitted that the banking system is still going through liquidity crunch. He expressed concern over declining deposits in banks. “The provision of income source disclosure might have hit deposit collection,” said Khatiwada.
Although Khatiwada said that major economic indicators were sound, the country’s economic growth is behind the target and balance of payment (BoP) is still huge. Despite initial target of 5.5 percent, economic growth is expected to shrink at 3.47 percent this year. “One can term this year as less effective in terms of economic growth,” said Khatiwada.
Governor Yubraj Khatiwada on Wednesday said main indicators of banks and financial institutions (BFIs) are in a satisfactory state. According to Khatiwada, capital adequacy ratio, non-performing loan, liquidity and credit to deposit ratio are sound.
The governor’s statement has come at a time when bad corporate governance has hit the country’s financial sector.
According to the central bank, commercial banks’ capital adequacy ratio and non-performing loan (NPL) level are at 13 percent and 2 percent, respectively, and the credit-to-deposit ratio (CD Ratio) stands at 81 percent. “All these indicators show that banks are in a sound health. Therefore, banks are safe,” said Khatiwada at a press meet here.
Khatiwada admitted that the banking system is still going through liquidity crunch. He expressed concern over declining deposits in banks. “The provision of income source disclosure might have hit deposit collection,” said Khatiwada.
Although Khatiwada said that major economic indicators were sound, the country’s economic growth is behind the target and balance of payment (BoP) is still huge. Despite initial target of 5.5 percent, economic growth is expected to shrink at 3.47 percent this year. “One can term this year as less effective in terms of economic growth,” said Khatiwada.
Upper Tamakoshi hydel Project: PM Khanal lays foundation stone
DOLAKHA, MAY 18 -
The formal laying of the foundation stone of the country’s largest hydro power project so far took place on Wednesday. Prime Minister Jhala Nath Khanal laid the foundation stone of the Upper Tamakoshi Hydroelectric Project (UTKHEP) in Lama Bagar, Dolakha, amid a function.
With this, the 456 MW project has formally entered into the construction phase. The power generated from the project is expected to be linked with the national grid within next four years. What makes this project special is it is the first large-scale hydropower project being constructed through domestic financial resources and its early completion will provide relief from ongoing power crisis.
The total estimated cost of the project is Rs 35.29 billion and is expected to be completed by 2015. The project completed its financial closure last week following the signing of a loan agreement between Nepal Telecom (NT) and the Nepal Electricity Authority (NEA).
Four domestic institutions—Employees Provident Fund (EPF), Nepal Telecom (NT), the Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS—have signed loan agreements with the project. EPF, NT, CIT and RBS are lending Rs 10 billion, Rs 6 billion, Rs 2 billion and Rs 2 billion, respectively. The government has also pledged Rs 11.8 billion.
Of the total project cost, 70 percent will be covered from loans and the rest will be distributed as shares to all shareholders of the project. According to the project, 10 percent of the shares will be provided to Dolakha locals and 15 percent to general public. The project has also already completed a power purchase agreement (PPA) with the Nepal Electricity Authority (NEA) which has 41 percent stake in the project.
As per the PPA, NEA will buy electricity at an annual average rate of Rs 3.50 per unit, considering 2010-11 as the base year of the project construction. However, it will have to purchase electricity at Rs 5.30 per unit in 2016 when the project completes.
Addressing the foundation stone laying programme, PM Khanal said arrangement of such a huge amount for the project in the domestic level was a big step forward and also shows a good indication for other possibilities in future. “A successful completion of this project will open new doors for domestic financing for other big projects,” he said.
The Prime Minister said the project is a milestone as it received support from all and is a role model for the country’s energy sector. He added the government will also attract foreign investment. “But we will give priority to domestic investors for making the country self-reliant.”
Deputy Prime Minister and Home Minister Krishna Bahadur Mahara assured full support from his party UCPN-Maoist, as the project is a model of local investment. Energy Minister Gokarna Bistra urged the political parties to keep aside political interests while working for the development of the power sector. He also committed to complete the project in stipulated time by working round the clock to avoid any possible fiascos like that of Middle Marsyangdi Project.
Top level government officials, including Information Minister Agni Sapkota attended the programme.
The formal laying of the foundation stone of the country’s largest hydro power project so far took place on Wednesday. Prime Minister Jhala Nath Khanal laid the foundation stone of the Upper Tamakoshi Hydroelectric Project (UTKHEP) in Lama Bagar, Dolakha, amid a function.
With this, the 456 MW project has formally entered into the construction phase. The power generated from the project is expected to be linked with the national grid within next four years. What makes this project special is it is the first large-scale hydropower project being constructed through domestic financial resources and its early completion will provide relief from ongoing power crisis.
The total estimated cost of the project is Rs 35.29 billion and is expected to be completed by 2015. The project completed its financial closure last week following the signing of a loan agreement between Nepal Telecom (NT) and the Nepal Electricity Authority (NEA).
Four domestic institutions—Employees Provident Fund (EPF), Nepal Telecom (NT), the Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS—have signed loan agreements with the project. EPF, NT, CIT and RBS are lending Rs 10 billion, Rs 6 billion, Rs 2 billion and Rs 2 billion, respectively. The government has also pledged Rs 11.8 billion.
Of the total project cost, 70 percent will be covered from loans and the rest will be distributed as shares to all shareholders of the project. According to the project, 10 percent of the shares will be provided to Dolakha locals and 15 percent to general public. The project has also already completed a power purchase agreement (PPA) with the Nepal Electricity Authority (NEA) which has 41 percent stake in the project.
As per the PPA, NEA will buy electricity at an annual average rate of Rs 3.50 per unit, considering 2010-11 as the base year of the project construction. However, it will have to purchase electricity at Rs 5.30 per unit in 2016 when the project completes.
Addressing the foundation stone laying programme, PM Khanal said arrangement of such a huge amount for the project in the domestic level was a big step forward and also shows a good indication for other possibilities in future. “A successful completion of this project will open new doors for domestic financing for other big projects,” he said.
The Prime Minister said the project is a milestone as it received support from all and is a role model for the country’s energy sector. He added the government will also attract foreign investment. “But we will give priority to domestic investors for making the country self-reliant.”
Deputy Prime Minister and Home Minister Krishna Bahadur Mahara assured full support from his party UCPN-Maoist, as the project is a model of local investment. Energy Minister Gokarna Bistra urged the political parties to keep aside political interests while working for the development of the power sector. He also committed to complete the project in stipulated time by working round the clock to avoid any possible fiascos like that of Middle Marsyangdi Project.
Top level government officials, including Information Minister Agni Sapkota attended the programme.
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