Energy-based industries absorb lion’s share of investments

The country saw massive investments being made in energy-based industries in the last fiscal year. According to the latest statistics of the Department of Industry (DoI), Rs 67.21 billion, or 85.5 percent of total investments, was poured into energy-based industries including hydropower, solar and bio-mass.

The number of registrations of energy-based industries has shot up too. Compared to 14 industries in 2009-10, the last fiscal year saw 22 industries being registered at the department.

With big money being poured into energy-based industries, the proposed capital investment in industries in the last fiscal year has surged significantly compared to 2009-10 even though there were fewer industries registered that year. The DoI’s statistics show that the registered industries have a proposed investment of Rs 78.6 billion, up from 34.35 billion in 2009-10.

According to DoI director general Dhundi Raj Pokhrel, the size of capital investment increased with a rise in the number of hydropower and cement companies registered last year. A total of 16 hydropower companies, eight cement industries and three airlines were registered during the period.

However, registrations of medium and large industries fell 5.4 percent in terms of numbers with 244 such industries being registered last year compared to 258 in 2009-10. Pokhrel said the decline could be due to the government’s recent provision that requires potential industries to carry out a feasibility study before they can be registered.”

According to the DoI, 40 large industries have come up with a proposed investment of more than Rs 100 million. These include industries related to hydro power, cement, cable car, airline, agricultural products including pallet production and livestock farming.

Among the industries with large capital investments are Upper Tamakoshi (Rs 35.29 billion), Shree Sino Hydro Sagarmatha Power Company (Rs 12.37 billion) and Robust Energy (Rs 5.58 billion).

In terms of numbers, the service sector is at the number one position followed by manufacturing, tourism, agro-based and energy-based industries. Even though the service and manufacturing sectors attracted a higher number of investors last year, the capital investment in these industries is much lower than that of energy-based industries. But compared to 2009-10, registrations of manufacturing and service industries and their proposed capital investment both have declined in 2010-11 compared to 2009-10. With the manufacturing sector grappling with a host of problems from energy crisis to labour issues, a slowdown in numbers and capital is understandable.

The surge in investment in the tourism sector was due to Nepal Tourism Year 2011. With major business houses investing in cement industries with limestone mines, investment in mineral industries has gone up. Despite swelling investments, the DoI’s statistics show a decline in FDI last year. Of the total industries registered last year, 74 had foreign investments against 171 in 2009-10. The number would have been less hadn’t it been for the 41 industries with foreign investment registered in the last two months of 2010-11. - @ ekantipur