The government is mulling to restructure Investment Board Nepal (IBN) to permit it to issue one-door approval to all public private partnership (PPP) projects by making a new law.

Currently, the Finance Ministry is preparing the Public Private Partnership Act which will regulate IBN’s operations, ministry sources said. Presenting the annual budget for the next fiscal year beginning mid-July, Finance Minister Yubaraj Khatiwada said the government would amend the Investment Board Act 2011 to empower IBN to provide one-door approval to PPP projects.

The upcoming PPP Act will supersede the existing Investment Board Act, and the operation of the board will be carried out under the new law, according to sources at the Finance Ministry. The new act will include provisions contained in the existing Investment Board Act that will allow the board to give investment approval to private projects of a certain size.

The Investment Board Act allows the board to provide investment approval to firms investing Rs10 billion or developing hydropower projects with an installed capacity of 500 MW or more. The new act, however, might change the threshold, according to sources.

The upcoming PPP Act will also govern the prime minister-led Project Implementation Directive Committee as envisioned by the annual budget. Khatiwada pointed out the importance of the committee to conduct result-oriented monitoring of large projects.The Finance Ministry has prepared the first draft of the act and it will hold consultations with stakeholders before presenting it to the Cabinet for its approval.

After getting the Cabinet’s okay, the bill will be sent to Parliament for its endorsement. Finance Ministry officials said the new act would strengthen IBN by expanding its work area and prevent disputes with different ministries over its purview, which have surfaced occasionally. Currently, IBN and the Ministry of Energy, Water Resources and Irrigation are at loggerheads over the implementation of hydropower projects with an installed capacity of more than 500 MW.

The dispute flared up between the two in December 2018 after IBN asked the ministry for the implementation rights for the 688 MW Betan Karnali and 617 MW Bheri-1 hydropower projects in western Nepal, claiming that it held the sole authority to execute schemes with a capacity of 500 MW

or more.

IBN had asked the ministry to send the documents of the two hydropower projects whose survey licences were issued by the ministry. Subsequently, the Energy Ministry decided to consult the Law Ministry before reaching a decision.

The Law Ministry said that the Energy Ministry had the sole authority to issue survey licences for hydropower projects, and that issuing such licences would not impinge on IBN’s jurisdiction nor violate the provisions of the Investment Board Act.Again in March 2018, the board demanded the original files of all 500 MW-plus hydropower projects that are currently being monitored by the ministry. IBN wrote to the Energy Ministry asking it to submit the files within 15 days after getting the go-ahead from the 29th IBN board meeting chaired by Prime Minister KP Oli.