Benedicto V. Yujuico, president of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI), was in Nepal to attend the 26th regional conference of CACCI. The Filipino investor, who has investments in countries like the USA, Singapore and Philippines itself, announced his plan to invest in Nepal´s hydropower sector also. Bhoj Raj Poudel of Republica talked with Yujuico on various issues pertaining to doing business in Nepal. Excerpts:
What is your assessment on Nepal´s investment climate?
Unlike in my past visits, this time I found more enthusiasm in the business sector. Local investors were optimistic, had a clear idea of projects they wished to pursue and were more vocal in seeking investment in areas like hydropower and tourism, among others. This has encouraged overseas investors like us. Hence, I announced an investment in the Upper Maikhola hydropower project.
How much are you investing? When will the actual investment be made?
I am investing capital equivalent to a 25 percent stake in an ongoing hydropower project. As the cost of the project is valued at US$ 20 million, my portion of the investment will be around US$ 5 million. I am going to make the investment in the very near future.
Why did you choose the hydropower sector?
The demand for power is huge in Nepal. However, the sector has not managed to get enough capital and technology so far. Probably for this reason, I observed excessive electric shortages even here in Kathmandu. But what I know is hydropower is also a relatively stable sector. Beside, energy is a key sector of any economy; you need it to run every other industry and business. So, I believed making an investment in hydropower will be a more meaningful thing to do at this juncture.
Are you aware of the challenges and risks of investing in Nepal?
Yes, I am. There are structural problems in Nepal´s hydropower sector. The cost of production is high compared to the returns due to a number of constraining factors. It was exactly the same in the Philippines, where I had a project of 300 MW capacity till a few years ago. But the political leadership there showed the will to change that situation. They decided to make energy available to the people even at high cost. People also realized that higher-cost power is better than no power at all. I am confident the leaders here will show strong political will to change the situation. Hence, I decided to make the investment.
In you opinion, what are the things that Nepal should immediately do in order to attract more foreign direct investment (FDI)?
There are many areas needing improvement. But I have not much to say as the Nepali private sector and officials are aware of them and are discussing them. But I have a humble suggestion: Nepal should make its sole international airport (Tribhuvan International Airport) a bit more advanced. Foreigners coming here after a long trip look for a prompt and smooth immigration service and other facilities. Here, everything is done manually and hence services are slower. This makes the first impression of the country a bad one. I want this to be improved.