Investment Board to approve Rs 25 billion cement factory
Investment Board of Nepal is going to approve Rs 25 billion cement factory.
The board meeting after the Tihar festival is going to approve India's Reliance Industries' Rs 25 billion cement factory for foreign direct investment, informed external affairs head of the board Ghanashyam Ojha.
The board – chaired by the Prime Minister Sushil Koirala – has received the proposal from the Reliance Industries that is owned by India's Ambani group, he said, adding that the company is planning to set up the cement factory in either the central region or the eastern region of the country. "The Department of Mines and Geology has already given its permission to the factory in mid-July."
The approval got delayed due to the board's busy schedule with the project development agreement (PDA) on Upper Karnali Hydropower Project with another Indian firm GMR.
After the board's approval – post Tihar festival that ends on October 25 – Reliance will conduct environmental impact assessment (EIA). The company will then submit the EIA report to the board, through Ministry of Environment.
After the clearance of the EIA from the board, Reliance will start the work to set up the factory, Ojha added.
Reliance has, however, demanded that the government provide 60 MW of uninterrupted supply of electricity to the factory, he said, adding that the company has demanded that it should be provided subsidy in the import of coal or other fuel for generating electricity, in case the government is unable to provide uninterrupted supply of electricity.
More cement companies both domestic and foreign investment are coming up lately as the demand for cement has increased due to construction of big infrastructure projects including hydropower projects lately.
The government – to encourage the cement industries – promised to provide access road and electricity to new cement factories. According to Trade and Exports Promotion Center (TEPC), import of cement has gone down by 19.2 per cent to Rs 3.18 billion in the fiscal year 2013-14 compared to a fiscal year ago in 2012-13, when the country saw Rs 3.94 billion worth cement import. But the country has seen rise in import of clinker as most of the domestic cement factories are dependent on imported raw material for cement that is clinker. Only few of the cement factories rely on domestic mines and majority of them have been importing clinkers.
According to central bank, in the fiscal year 2013-14, the country imported Rs 9.71 billion worth cement and clinkers that is some three per cent higher than that of a fiscal year ago in 2012-13, when the country imported Rs 9.42 billion worth cement and clinkers.