Himal Press 
KATHMANDU: The government has initiated the process of drafting a law for alternative financing.
The Alternative Financing Bill, 2025, is being drafted to identify and utilize sources beyond traditional investment methods, according to the Ministry of Finance.
According to Finance Ministry Spokesperson Mahesh Bhattarai, the draft is under discussion within the ministry. “The drafting process is ongoing, and consultations with stakeholders are taking place,” Bhattarai said.
Experts have long emphasized the need to explore alternative sources of financing beyond conventional methods like government funding, public-private partnerships and foreign direct investment.
Through the budget for fiscal year 2024/25, the government said that it wold seek alternative investment sources. The budget document states that the government will leverage blended finance – a mix of commercial, private and non-governmental funds, grants, and concessional loans – to mobilize development aid. Officials say such approaches are necessary to implement critical infrastructure projects essential for the country’s prosperity, sustainable development and productivity enhancement. In line with this, the government plans to introduce the bill to operationalize alternative financing through various financial and monetary instruments such as bonds, guarantees and sovereign wealth funds.
Alternative financing refers to mechanisms for pooling resources through various means. It includes crowdfunding, where equity, debt, or a mix of both, is raised from investors or the general public for specific projects. Similarly, project-specific loans can be raised using guarantees provided by implementing agencies. Long-term capital from domestic or foreign investors can also be collected to establish investment funds.
Establishing remittance funds by collecting designated amounts from Nepali citizens abroad or non-resident Nepalis (NRNs) is another example of alternative financing. The budget for the current fiscal year proposes setting up a sovereign fund to channel remittances into productive sectors and use the fund as a complementary mechanism for public infrastructure investment via special purpose vehicles.
The draft also includes provisions for setting up guarantee funds to issue loans or bonds with full or partial guarantees from international financial institutions. Additionally, it suggests monetizing the assets or operations of specific entities to create project-specific funds. Other prescribed mechanisms for raising funds are also covered under alternative financing.
The draft states that funds raised through alternative financing will be allocated for identifying, developing and implementing projects that promote employment, deliver significant economic returns or contribute to GDP growth. According to the draft, alternative financing sources can be used for infrastructure projects such as electricity generation, transmission, and distribution; roads; railways; airports; tunnels; and industrial development infrastructure (including special economic zones, industrial parks, dry ports, and IT parks). They can also be utilized for urban infrastructure, cable cars, ropeways and similar structures.
(Translated from RSS)
