Kathmandu-Foreign investment set to come to Nepal for the first time for green hydrogen production.

A Memorandum of Understanding (MoU) has signed on Thursday between the Investment Board Nepal and the South Korean company, G-Philos Cooperative Limited. 

The Korean company has advanced a proposal to establish a green hydrogen production and fuel cell plant in Nepal.

According to Pradyumna Prasad Upadhyaya, the IBN's spokesperson, the company has proposed an initial investment of about 500 million US dollars.

The initial plan is to commence the hydrogen production with a 20-megawatt capacity as a pilot project, he added. 

Earlier, on May 28, the company submitted a pre-feasibility study report to the Investment Board. Based on that report, the 63rd meeting of the Investment Board, held on June 28, approved moving forward with a detailed feasibility study.

A committee has already been formed under the convenorship of a technical joint secretary to evaluate whether or not to proceed with the project through the Swiss Challenge process after the detailed report is received.

According to the proposal submitted by the company, the first phase of investment will be around  Rs 20 billion . If the pilot project is successful, there are plans for a phased expansion with a total investment of up to Rs 100 billion Nepali rupees in the future.

The company aims to utilize wastes surplus power in monsoon by using electrolysis technology. The produced green hydrogen can be used  in steel industries, chemical fertilizer production, ammonium nitrate manufacturing, and energy storage. The company has also prioritized the possibility of exporting it to neighboring countries like India and China.

Globally, green hydrogen is being advanced as a priority alternative clean energy source.
With Nepal aiming for a net-zero carbon emission target by 2050, this project is expected to contribute to achieving that goal.

Previously, Kathmandu University demonstrated technical feasibility by testing a hydrogen car and operating Nepal's first refueling station. The government had already issued the Green Hydrogen Production, Use, and Development Policy 2080 last year.