AGP Executive Report

Energy Sector Liberalisation: Nepal has opened the energy sector for private investment, with the Energy Minister saying private players can now enter transmission, distribution and trading, alongside new renewable and efficiency bills in the current Parliament session. Hydropower Governance: The government is moving to revoke licenses of 38 stalled hydropower projects (1,388 MW) that made little progress despite PPAs, as part of a wider “license raj” push. Clean Air Push: Nepal Clean Air and Prosperity Project (NCAP) is being readied for 2026/27 with Rs 8.71 billion, backed by a World Bank concessional loan and grant, aiming to cut industrial pollution and improve monitoring. Private Power Role: IPPAN’s AGM heard that reforms will support private sector participation and expanded electricity trade, with stricter action against license holders who delay construction. Urban Transport Restructure: Kathmandu Valley’s public transport is set for major restructuring under KUTP with ADB and GEF support, targeting route overlap, weak regulation and low service quality. Consumer Protection: The Department of Commerce, Supply and Consumer Protection fined 12 firms, including Singha Durbar’s central canteen, over quality and labeling issues. Agribusiness & Food Security: CIMMYT and partners are pushing maize commercialization in Banke to reduce imports and boost productivity through seed systems, mechanization and market links. Health & Industry Link: India is funding a hospital in Humla (NPR 148 million) and construction of additional health and school facilities under HICDP. Climate Risk Watch: ICIMOD warns that even with below-normal monsoon rainfall, short intense bursts can still trigger floods and landslides across the HKH region.

Energy Policy Overhaul: Nepal’s Energy Minister says the country is at the “starting point” of transforming the energy sector, with bills lined up and a push to involve the private sector in generation, trade, and transmission. License Raj Crackdown: A high-level committee has recommended revoking generation licenses of 38 hydropower projects (1,388 MW) that stalled after signing PPAs, aiming to end “license raj” and reward real construction progress. Private Power Push: NEA acting MD Dirghayukumar Shrestha says private participation is key to stop monsoon power wastage and speed up transmission, targeting export of up to 1,000 MW to India. Hydropower Governance: IPPAN leaders welcomed the direction, while industry bodies urged faster implementation and policy reforms. Consumer Protection: The Department of Commerce fined 12 firms, including Singha Durbar’s Central Canteen, for quality violations and ordered destruction of substandard goods. Drug Controls: Nepal tightened rules on pregabalin, dicyclomine and promethazine, requiring stricter import and sales records to curb misuse. Transport & Infrastructure: Kathmandu Valley’s public transport system is set for major restructuring under KUTP with ADB support; meanwhile, a new RCC underpass at Bhawanijhora in Chhukha is expected to reduce monsoon disruptions. Business & Markets: NEPSE closed slightly down, while Nepal’s Food Management and Trade Company invited applications for a new CEO. Industry-Trade Diplomacy: Nepal and India discussed AI collaboration for economic growth, and Nepal’s FM Shisir Khanal is set to visit China (June 14–17) to deepen cooperation. Agriculture & Food Security: Nepal clarified it is not banning Indian mango imports outright, only enforcing phytosanitary measures, amid ongoing trade friction. Climate Risk Alert: ICIMOD warns that even with below-normal monsoon rainfall, short intense bursts can still trigger floods and landslides across the HKH region.

Aviation & Tourism: flydubai will start a new daily Dubai–Pokhara service from Sept 23, becoming the first carrier to link the UAE directly with Nepal’s tourism hub beyond Kathmandu. Banking & Finance: Nepal’s BFIs deposits rose 9.4% to Rs 7,949.28B in the first 10 months, while private-sector credit grew 5.7% to Rs 5,809.71B. Agriculture & Food Markets: Nepal issued a Minimum Support Price directive for key grains and sugarcane, aiming to set prices before planting/harvest; meanwhile sugar prices in India are rising after an export ban, with Nepal saying stocks are adequate for months. Energy & Hydropower: the government moved to revoke licences of 38 hydropower projects stuck at zero progress after PPAs, and NEA is pushing to collect unpaid dues. Cross-border Trade & Policy: Nepal’s foreign minister clarified PM Balendra Shah’s border remarks as cross-border occupation concerns, reiterating diplomatic resolution with India. Climate & Risk: ICIMOD warns the 2026 monsoon may be lower but more dangerous, with intense bursts raising flood and landslide risks. Industry & Business: IMF urges Nepal to tighten crypto monitoring despite the 2021 ban, citing continued inflows linked to stablecoins. Transport & Infrastructure: weather updates point to scattered rainfall and thunderstorms across parts of Nepal.

Hydropower & Grid Build-Out: MCA-Nepal broke ground on the Ratmate Substation and a 297-km transmission line, aiming to ease bottlenecks and improve reliability for households and businesses. Power Sector Cashflow: Energy minister ordered NEA to intensify recovery of outstanding electricity dues after Auditor General flagged NPR 50.01 billion in arrears, including industrial and feeder-related charges. Energy Industry Leadership: IPPAN elections saw several officials elected unopposed, while candidates pushed for faster reforms like Open Access, grid-code harmonisation, and simpler PPA processes to cut load-shedding. Agriculture Policy & Inputs: Government claims 5.58 lakh metric tons of chemical fertiliser supplied so far, with plans to reach about 6 lakh by mid-Jestha and additional arrivals for paddy season. Farmer Price Assurance: A Minimum Support Price directive will set prices for major grains and sugarcane before planting/harvesting, though provinces’ data collection and coordination may slow rollout. Trade & Payments: Nepal and India advanced economic ties with an India-Nepal Economic Cooperation Forum and launched UPI-NPI cross-border remittances for instant transfers. Mango Import U-Turn: Nepal clarified it has not banned Indian mangoes; imports continue with phytosanitary requirements after earlier confusion over pesticide/quarantine concerns. Market Watch: NEPSE fell 8.14 points to 2,728.03 as turnover dropped to Rs 3.90 billion. Climate & Risk: Experts warn South Asia’s monsoon may be drier overall but still bring intense bursts that can trigger floods and landslides. Agri-Weather Hit: Storm damage in Kailali destroyed banana plants, with farmers reporting losses up to Rs 1.4 million. Tea Export Friction: Suryodaya Municipality says Nepali tea shipments to India are stuck in warehouses due to new Tea Board testing delays, disrupting sales.

Monsoon Watch: ICIMOD warns South Asia may see a drier monsoon overall, but short, intense downpours can still trigger floods and landslides—raising drought risk too. Agri Prices: Kalimati market set wholesale rates for fruits and vegetables for Jestha 28, including tomatoes, potatoes, onions, greens and mushrooms. Hydropower & Grid: MCA-Nepal has resumed/started major transmission works—groundbreaking for substations and a 297-km line under the MCC compact—while a 220-kV switchyard in Myagdi connected 127.8 MW to the national grid. Finance & Governance: Finance Minister Swarnim Wagle says he welcomes investigation into alleged budget errors, while BFIs’ private sector lending grew only 5.7% in 10 months, below the 12% target. Nepal–India Trade: Nepal denied any ban on Indian mangoes, saying border restrictions are technical phytosanitary steps; meanwhile, India plans more land ports to boost cross-border trade. Fertilizer Supply: India agreed to supply 50,000 metric tons of chemical fertilizer to Nepal, but Sudurpashchim local units failed to collect allocated stocks. Industry & Services: Education consultancies face enforcement after weak regulation; the new Science, Technology and Innovation ministry begins operations. Health Tech: Infosys-backed 4baseCare raised Rs 128 crore to expand AI-led cancer testing globally.

Education & Compliance: Nepal’s education consultancy sector is under pressure as the Ministry of Education flags non-renewed registrations; police have raided 95 consultancies and legal action is underway, with 760 consultancies renewed for the current academic year. Innovation & Institutions: The newly formed Ministry of Science, Technology and Innovation has started from scratch after leadership appointments, beginning an organizational survey and setting up its website template. Energy Infrastructure: MCA-Nepal broke ground on 400kV substations and a 297km transmission line to strengthen Nepal’s grid and cut bottlenecks, supporting more reliable power for households and businesses. Electricity Budget Push: Government allocated NPR 114.02 billion to the Energy, Water Resources and Irrigation Ministry for FY 2083/84, targeting added generation capacity and expanded transmission lines. Nepal–India Trade & Food Supply: Nepal’s Agriculture Ministry says there is no mango import ban, but traders are still worried after restrictions tied to pesticide residue checks and quarantine requirements; imports reportedly continue under phytosanitary conditions. Digital Payments & Cross-border Links: Nepal and India moved ahead with UPI–NPI P2P remittances for faster cross-border transfers, plus MoUs on digital technologies and language translation infrastructure. Agriculture Data Systems: Around 2.5 million farmers are enrolled in Nepal’s Farmer Registration System to enable subsidy delivery and classification via identity cards. Hospitality Investment: Marriott signed to bring the first JW Marriott to Kathmandu Valley, expected to open in early 2031, signaling continued luxury tourism investment. Inflation Watch: Nepal Rastra Bank reports inflation at 5.04% (mid-May), driven largely by petroleum price hikes amid US-Iran tensions.

Trade & Agriculture: Nepal has restricted fresh mango imports from India, citing excessive pesticide residues and weak quarantine infrastructure at border points—after Japan’s similar move—boosting local market supply even as domestic output may not fully meet demand. Public Health & Food Systems: Emergency measures are underway against H5N1 bird flu; 515,000 birds from 72 farms across 10 districts have been destroyed, with the virus now detected in Kathmandu Valley areas, though control is reported stronger in some regions. Inflation & Energy Costs: Nepal’s consumer inflation hit 5.04% (mid-May), driven largely by higher petroleum prices after US-Iran tensions; food and beverage inflation also rose. Agri-Prices: Kalimati set today’s wholesale rates for key produce like tomatoes, potatoes, onions, cabbage and mushrooms, shaping market expectations for traders and retailers. Digital Infrastructure: Ncell’s Nakkhu Integrated Data Center received ANSI/TIA-942-C Tier III (Design & Constructed) certification, highlighting reliability and security for Nepal’s growing data hosting needs. Cross-Border Payments: India and Nepal operationalised a UPI–NPI linkage for instant cross-border remittances via mobile numbers/UPI IDs, aiming to cut cost and improve remittance speed. Governance & Services: Health Minister Nisha Mehta says Nepal will “make a fresh start” in the health insurance scheme with new modalities, and push to clear pending insurance payments within Ashar.

Dairy Sector Overhaul: Agriculture Minister Gita Chaudhary took charge of the National Dairy Development Board and pushed for a results-driven, accountable NDDB focused on higher production, better market management, and stronger farmer protection. Cabinet & Budget Watch: Nepal’s cabinet reshuffle installed new portfolios including Industry, Commerce and Supplies under Gauri Kumari, while private sector groups welcomed the budget “in principle” but warned about past patterns of announcements without delivery; ICAN also criticized the budget for failing to reform the tax system and address the cooperative crisis. Inflation & Cost Pressure: Nepal’s inflation jumped to 5.04% in mid-May, led by food (fruits, ghee/oil) and non-food/services (transport, miscellaneous services), with urban areas hit harder. Power & Industry Cashflow Stress: Nepal Electricity Authority reported Rs 50.01 billion in unpaid tariff dues, and industrial areas issued a 7-day ultimatum over long-standing rent and service dues. Energy Projects: Construction started on the 180 MW Kaligandaki Gorge Hydropower Project, while BPC launched a 50 kW green hydrogen pilot in Pyuthan. Food Trade & Safety: Nepal restricted imports of Indian mangoes over pesticide residue and border quarantine gaps, boosting local market supply but raising concerns for juice and year-round demand. Digital Payments for Remittances: India–Nepal launched a UPI-NPI remittance corridor for real-time cross-border transfers using mobile numbers/VPAs and UPI IDs. Market Pulse: NEPSE inched down 1.54 points with turnover rising to Rs 6.44 billion.

Nepal-India Trade & Food Safety: Nepal banned Indian mango imports after border quarantine inspectors found excessive pesticide levels, a move welcomed by officials as safer for consumers but feared by traders for shortages and price spikes. Hydropower & Community Rights: Nepal’s Supreme Court issued a six-point directive on the Phukot Karnali Hydropower Project, ordering revisions to the MoU, stronger resettlement plans, and strict legal compliance to protect affected communities. Finance & Reform: The IMF completed its final ECF review for Nepal, approving about $42.9m, citing governance and financial-sector reforms while warning growth could be hit by protests, weaker agriculture, slower private investment, and Middle East spillovers. Innovation for Industry: WFP launched a climate and food security innovation accelerator in Nepal, backing selected startups with funding and mentorship for solutions like solar irrigation, digital farm advisory, and climate-linked insurance. Startup Push: Nepal’s budget earmarked nearly Rs 4bn for science, tech and innovation, including Rs 500m for a Nepal Enterprise Facility to support startups and SMEs. Energy Sector Pressure: NEA is being pushed to recover long-pending dues from 61 firms tied to dedicated feeders/trunk lines, with arrears reported at Rs 26.95bn. AML Tech Rollout: ZIGRAM partnered with AMNIL Technologies to deploy AML and financial crime compliance systems across Nepal’s banking and payments ecosystem. Everest Operations: Everest’s new mountain ranger programme and drone-assisted logistics are reducing waste and improving safety in the Khumbu region. Market Watch: NEPSE extended losses, falling sharply on lower turnover and broad sector declines.

NEPSE Slide: Nepal’s stock market extended losses, with NEPSE down 20.27 points to 2,735.41 as trading turnover fell to Rs 4.08 billion and most sectors closed in the red, led by trading and others. Startup Push: The government earmarked nearly Rs 4 billion for science, technology and innovation in FY 2026/27, including Rs 500 million for a Nepal Enterprise Facility to back startups and SMEs. Power Dues Crackdown: Energy authorities moved to recover unpaid electricity tariffs tied to dedicated feeders/trunk lines, with arrears reported at Rs 50.1 billion and 61 defaulters facing Rs 26.95 billion in outstanding consumer dues. Tunnel Readiness: Nagdhunga–Sisnekhola tunnel operations are targeted for the second week of August, with technical works at 99.5% and 150 staff recruited for round-the-clock operations. Industrial Stress: Udyapur Cement is stuck due to lack of packaging sacks, leaving about Rs 63.5 million worth of cement unsold in warehouses. Energy Costs Watch: Crude oil prices jumped amid West Asia tensions, raising pressure on regional fuel and logistics costs. Climate & Food Innovation: WFP and Nepal launched the AFCIA accelerator to fund local climate-smart food system startups, including solar irrigation and digital farmer advisory tools. Hospitality Investment: Marriott and CG Hospitality Global signed to bring three premium hotels to Nepal and India, including The Ritz-Carlton and The Westin in Kathmandu.

Hospitality & Tourism: Marriott International and CG Hospitality have signed an agreement to develop and operate luxury hotels in Nepal—The Ritz-Carlton and The Westin in Kathmandu—plus a JW Marriott in Siliguri, aiming to lift high-end tourism and jobs across South Asia. Energy & Household Costs: India’s domestic LPG price was hiked by ₹29 per 14.2kg cylinder, with the government saying global LPG costs jumped ~46% due to West Asia disruptions and that it is absorbing about ₹700 under-recovery per cylinder to keep prices low for consumers. Nepal–India Border Reset: Nepal’s FM Shishir Khanal, after talks with EAM S Jaishankar, said border disputes should be handled through existing bilateral mechanisms with an “open heart,” rejecting third-party mediation and focusing on economic transformation, trade, connectivity, and energy cooperation. Digital Payments & Cross-Border Tech: India and Nepal moved to operationalise cross-border remittance/payment linkages, including UPI–NPI linkage, alongside cooperation on language AI and digital public infrastructure. Climate & Mountain Risk: Reports highlight changing Himalayan disaster patterns tied to climate change, while BLACKYAK hosted the “Himalayan Climate Charter 2026: Namche Summit” to push practical climate action. EV Infrastructure: Nepal is urged to scale EV charging to at least 10,000 stations by 2030, as current coverage remains limited and concentrated in major cities. Wildlife Conservation: Researchers confirmed a rare Chinese pangolin in a sacred community forest in Sunsari using camera traps, adding to conservation knowledge for critically endangered species.

Health Insurance Reform: Nepal’s Ministry of Health says it will amend the Health Insurance Act to fix complaints and make the scheme more effective, with a push to reach citizens with basic services within three years. Nepal–India Border Diplomacy: Foreign Minister Shishir Khanal reiterated Nepal wants to resolve Kalapani, Lipulekh and Limpiyadhura through existing bilateral mechanisms only, ruling out third-party mediation while citing access to historical documents if needed. Luxury Tourism Push: Marriott International and CG Hospitality Global signed MoUs to build two ultra-luxury hotels in Kathmandu—Ritz-Carlton and Westin—targeting openings by 2031 and adding nearly 300 rooms. Cross-Border Digital Payments: Nepal and India moved forward on operationalising cross-border peer-to-peer payments, building on earlier NCHL–NPCI MoUs and QR payment rollout. EV Charging Gap: Nepal’s EV promotion study urges at least 10,000 charging stations by 2030, noting today’s network is far smaller and concentrated in major cities. Tech & Skills Spotlight: Huawei ICT Competition drew 220,000+ students and faculty from 2,000+ institutions across 100+ countries, marking its biggest edition. Climate Risk for Mountaineering: Experts warn climate change is making Himalayan climbing more dangerous via higher snowlines, faster ice melt, and worsening erosion. India Border Trade Tech (Regional Watch): India prepares to launch its Land Port Management System on June 9 to digitise land-port cargo and passenger processing.

India-Nepal Diplomacy: Nepal FM Shishir Khanal met EAM S Jaishankar in New Delhi, reviewing cooperation on development, connectivity, trade/transit, energy and people-to-people ties, and pushing a “no old baggage” reset focused on economic transformation. Cross-Border Payments & Digital Tech: India and Nepal launched UPI–NPI peer-to-peer linkage for personal remittances, and signed a BHASHINI–Kathmandu University MoU to build multilingual AI and “voice-first” digital public infrastructure. LPG & Energy Costs: India raised domestic LPG by Rs 29 to Rs 942 per 14.2-kg cylinder, but the government says households still pay far below market-linked supply cost (over Rs 1,600) due to subsidies/under-recovery absorption; PMUY beneficiaries effectively pay Rs 642. Food Safety Push: Nepal’s Health Minister Nisha Mehta pledged stronger food safety implementation, including lab upgrades, risk-based market monitoring, and better hygiene from production to consumption. Electricity Dues for Industry: NEA revived an administrative review committee to settle long-running dedicated feeder/trunk line electricity dues owed by industrialists. Climate & Environment: Youth in Shuklaphanta vowed practical climate action, including tree planting and stopping land from going barren. Tourism & Local Industry: A community-built trekking route in Ruby Valley links Kalo Daha/Seto Daha to Harchi Pass, with plans for shelters and support infrastructure.

Nepal-India Dealmaking: In New Delhi, Foreign Minister Shisir Khanal met EAM S. Jaishankar as both sides pushed a “reset” in ties, with Jaishankar virtually handing over 72 health facilities and 12 cultural heritage projects and jointly launching UPI–NPI linkage to ease cross-border remittances; they also exchanged an MoU between Digital India Bhashini and Kathmandu University for a “Voice First” language translation platform. Energy & Industry Finance: Nepal’s Social Security Fund says it has collected Rs 111.07 billion and will prioritize investments in hydropower, transmission, and solar/renewables, with proposals under review and a stated 20 MW threshold for hydropower. Grid & Transmission Buildout: A PPP-backed West Seti 400 kV transmission line project is moving ahead via a new special-purpose company, aiming to connect western hydropower to the national grid. Market Pulse: NEPSE slipped 0.96% last week after the budget failed to spark sustained momentum, with investors losing about Rs 45 billion in market value. Urban Mobility: Uber debuted in Nepal with Uber Go/Comfort and Uber Bike, onboarding 2,000+ drivers early on. Rural Connectivity: Api Himal Rural Municipality in Darchula finally got road access to Ward 3, easing transport costs and isolation.

Energy & Power Sector: Nepal’s Energy Minister Biraj Bhakta Shrestha urged NEA to act fast on budget implementation, stressing timely completion of transmission lines and substations and stronger management-led execution. Mobility & Digital Services: Uber officially launched in Nepal with Uber Go, Uber Comfort and Uber Bike, partnering with Taximandu and citing early driver sign-ups and plans to expand beyond ride-hailing. Agribusiness & Food Prices: Nepal Layers Poultry Farmers Association revised egg farm-gate support rates upward, pushing retail prices to around Rs 25 per egg amid higher production costs and hot-weather supply pressure. Tourism & Local Industry: Parbat is emerging as an adventure tourism hub, with bungee, zip-lining and suspension bridges driving hotel and restaurant growth and more stopover visits from Pokhara-bound travelers. Aviation & Connectivity: Himalaya Airlines started direct Kathmandu–Shenzhen–Kathmandu scheduled flights, opening a new air corridor to China’s tech and manufacturing hub. Diplomacy for Trade & Energy: Nepal’s Foreign Minister Shisir Khanal arrived in India for talks with S Jaishankar, with development cooperation, trade/investment and power-sector cooperation expected on the agenda. Environment & Public Awareness: World Environment Day coverage in Nepal highlighted climate impacts on livelihoods and the need for nature-first, people-centered action. Industry & Capital Markets: Sopan Pharmaceuticals’ IPO listing on NEPSE began trading with an opening range set by the exchange. Safety & Infrastructure Risk: A fire destroyed a Bara cotton godown at Triveni Spanning Mills Industry, with police citing an electrical short circuit as the cause.

Aviation & Trade Connectivity: Himalaya Airlines launched the first direct scheduled Kathmandu–Shenzhen–Kathmandu service, with Airbus A320 flights starting June 4, opening a new air corridor to China’s tech-and-manufacturing hub. Mobility & Digital Services: Uber officially entered Nepal after trials, launching in Kathmandu and positioning itself against Pathao, InDrive and Yango. Energy Policy & Power Sector: Government clarified Budhigandaki hydropower will be developed as a multi-purpose project (power, irrigation, drinking water, fisheries, ecotourism) under an authority model; Energy Minister urged Nepal Electricity Authority to execute the budget fast, while 32 applications were received for the Electricity Regulatory Commission leadership. Hydropower Procurement Watch: A complaint alleges contract irregularities at Modi Hydropower Company, including claims of fake experience certificates used in tenders. EV Sector Scrutiny: APF seized 776 electric vehicles over suspected leaked tax-change plans and alleged fraudulent import documents. Business & Markets: NEPSE fell 11.37 points to 2,756.41; Nepal’s Chamber of Commerce pushed for an electricity-and-technology-led industrial transformation. Diplomacy: Foreign Minister Shishir Khanal began a visit to India (June 5–7) for talks with Jaishankar on trade, connectivity, energy and people-to-people ties. Environment & Wellness Tourism: World Environment Day events highlighted climate- and nature-friendly development, while spa industry standards were discussed to support Nepal’s 2027 wellness tourism push.