Nepal

Investment & Operational Criteria

Key Indicators

Risk Premia

6.250

%

Outlook

Neutral

Rating

CC|4S|±

Ranking

82

Reserves (1P)

Total

mm boe

Oil

0

%

Summary

Limited interest has been gained n Nepal due to better opportunities being available elsewhere.

Updated

January 1, 2024

Country Basics

Region

Asia - Central

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

NepalNepal

Southern Asia, between China and India.

Outline

Tax Regime
Type

PSC/PSA

Tax Regime
Notes

Relatively simple Production Sharing Contract ("PSC") fiscal system. Royalty is fixed, and there is no cost recovery ceiling. Profit oil sharing is based upon production rates; corporate income tax is payable by the contractor.

Investment & 
Operational
Climate

As the Government of Nepal (GoN) struggles to confront the economic and social effects of the COVID pandemic, it is unlikely a concentrated effort to improve the investment climate will be a high priority. In 2017, the Millennium Challenge Corporation (MCC) signed a USD 500 million Compact with the GoN that will focus on the electricity transmission and road maintenance sectors. The GoN has agreed to contribute an additional USD 130 million for these Compact programs. Once implemented, the MCC Compact should present opportunities for international firms to bid on tenders for construction and consulting projects expected to be issued in late 2020 and early 2021. Nepal’s location between India and China – two of the world’s largest markets and fastest growing economies – presents opportunities for foreign investors, particularly in light of market access preferences for Nepali-made products exported to India. In addition to its strategic market location, Nepal also possesses natural resources that have significant commercial potential.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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Asia - Central

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