Kathmandu-Development partners have been showing interest in investing in Nepal’s digital infrastructure.

Recently, the World Bank and the Asian Development Bank (ADB) jointly signed a loan agreement with Nepal for the digitization of public services, the first such joint initiative in South Asia.

Prior to this, the World Bank had already signed a loan agreement with Nepal under the Digital Nepal initiative. Beyond this, they have informed the Nepali side of their willingness to invest in other areas of digital infrastructure as well.

According to meetings with officials at Nepal’s Ministry of Finance, it is not only the World Bank and ADB that have expressed such interest. Countries such as India, the United States, and China have also stated their readiness to support Nepal in developing digital infrastructure.

In addition to Development partners and friendly nations, private investors have also shown interest. Companies ranging from Elon Musk’s Starlink to several Chinese firms have expressed a desire to enter the Nepali market.

However, despite growing interest from foreign investors in digital services and infrastructure, Nepal has not yet established sufficient infrastructure and policy frameworks to support such investments.

Institutions such as the World Bank and ADB have indicated their willingness to provide loans for infrastructure development, but they have also pointed out that Nepal lacks sufficiently liberal policies to attract the private investment that would be needed afterward.

They have particularly highlighted weaknesses in capital management. Since domestic capital is currently insufficient and foreign companies typically do not finance projects entirely through equity, easy access to debt financing is essential. To address this, they suggest that Nepal further liberalize its financial and monetary sectors.

They have also recommended that Nepal take initiatives to establish the necessary policy and institutional frameworks related to areas such as exchange rates and bond markets.

'Any foreign investor coming to Nepal looks for access to affordable financing, but our current system is not adequate for that,' said an official from the Ministry of Finance.