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The government’s decision to restrict imports of internal combustion engine (ICE) vehicles for eight months has turned out to be a boon for electric vehicles (EVs). Encouraged by lower customs duties and other taxes on imports and sales compared to ICE vehicles, the import of EVs surged by 64.77 percent in the first half of the current fiscal year. The latest foreign trade statistics published by the Department of Customs (DoC) show imports have grown remarkably particularly, of electric four-wheelers (cars, SUVs, micro-buses, and buses) and two-wheelers in the current fiscal year. According to DoC, imports of cars and SUVs have increased by 60.75 percent while the imports of two-wheeler grew by a whopping 243.80 percent. The growth in the car and SUV segment has been mainly driven by the surge of electric four-wheelers up to 100kW. According to DoC, the country has imported electric four-wheelers worth Rs 4.92 billion in the first six months of this fiscal compared to Rs 3.24 billion during the same period in the last fiscal year. Of the total imported vehicles during the first six months of the current fiscal year, 1,708 were equipped with electric motors up to 100KW. The imports of such EVs stood at 396 units in the first six months of the last fiscal year. The change in the tax arrangements on EVs by the government in the current fiscal year's budget has helped the market of 100kW EVs to boom. In the budget for FY2022/23, the then finance minister Janardan Sharma levied excise duty on top of the existing customs duty on EVs above 100 kW capacity. The government has imposed a 30 percent excise duty on vehicles with 100-200 kW motors. Similarly, a 45 percent excise duty has been imposed on the imports of vehicles with electric motors of 201-300 kW capacity and a 60 percent excise duty on vehicles with more than 300 KW motor capacity. The changes in tax structure have made EVs above 100 kW costlier in the market. Official statistics show the imports of EVs up to 100 kW have gone up by 331.31 percent in the first six months while imports of EVs above 100 kW have declined significantly. The biggest growth has been seen in the motorcycle/scooter segment. The imports of electric two-wheelers have increased by a whopping 243.80 percent in the current fiscal year. Nepal has imported 5,133 units of electric motorcycles/scooters in the first six months of the current fiscal compared to 1,493 units during the same period of the last fiscal. The micro-bus segments also grew by 88.09 percent. Nepal has imported 79 electric micro-buses in the first six months of the current fiscal year. Amid declining foreign exchange reserves which created fear that the country would head in the direction of Sri Lanka, the government imposed a complete ban on ICE vehicles along with a number of other goods starting from April 2022. Though measures to control the import of fuel-based vehicles helped to increase the imports of electric vehicles, the government’s policy towards promoting electric vehicles has remained inconsistent. Nepal’s second enhanced Nationally Determined Contributions (NDCs) submitted at the United Nations targets to achieve a 20 percent share of EVs in the public transport category by 2025. In 2018, the government proposed to turn at least 20 percent of public vehicles into electric buses by 2020, in a plan based on Nepal’s commitments at the 2015 UN climate conference in Paris. Yet the plan hasn’t moved an inch in the past five years. While presenting the budget for the fiscal year 2021/22, the then Finance Minister Bishnu Paudel had said that Nepal plans to shift from light vehicles that run on petroleum products to electric ones by 2031 and announced a strategic plan to lower fuel imports and the concomitant pollution. However, Nepal has taken only a baby step towards the electrification of the country’s transport system with an insignificant number of vehicles operating in the country being electric. Besides inconsistent taxation policy, the lack of adequate charging stations has also delayed the widespread adaptation of electric vehicles in the country. The Nepal Electricity Authority (NEA) said it has almost completed installing 50 charging stations. According to an official of NEA, as many as 25 charging stations have already come into operation while the installation of 30 has recently been completed and five are in the process of completion. Even the private sector is also coming up with new charging station plants. However, automobile dealers say that it is not enough to speed up the transition process.

The Sunkoshi-Marin Diversion Multi-Purpose Project has completed 2.432 kilometers of tunnel digging in the three and a half months since the start of the construction process. The construction of the 13.3 km long diversion tunnel with a diameter of 5.5 meters under the project was started on October 14 last year. The project aims to divert 67 cubic meters of water per second from the Sunkoshi River to the Marin River at Kusumtar of Kamalamai Municipality-2 in Sindhuli. According to the project chief Mitra Baral, the project plans to complete the tunnel digging in the next 18-19 months. The US technology Tunnel Boring Machine (TBM) has been used to dig the tunnel. "Currently, construction work is being carried out 24 hours a day with 3 shifts of 8-8 hours each," said Baral. " On average, 25 meters of tunnels are being dug every day." "If we do not encounter any geological difficulties or technical problems, the construction will be completed before the contract schedule," he added. The China Overseas Engineering Co won the contract for the construction of a tunnel for the Sunkoshi Marin Diversion Multipurpose Project by offering to do it for Rs 10.05 billion, nearly Rs 6 billion less than the price quoted by the government. The Department of Irrigation signed the project contract with the Chinese company on March 23, 2021. As per the contract, the work must be completed within 3 years of the start of construction. The water from the Sunkoshi will first be diverted to the Marin River in Sindhuli through the 7-meter-wide tunnel before being channeled into the Bagmati River. The water will then be collected at a barrage and distributed to irrigate fields. The tunnel is a part of the multi-billion Sunkoshi Marin Project located in Sindhuli and Ramechhap districts that aims to take water from the Sunkoshi River and direct it into the Bagmati River to irrigate 122,000 hectares of farmland in Rautahat, Dhanusha, Mahottari, Sarlahi and Bara districts in the southern plains. While the 13.3 km long tunnel will be completed within the next two years, the Irrigation Department estimates that the overall project will be fully operational only by 2029. The construction of other structures under the project has not started yet. The project proposes to construct a 12-meter-high barrage across the Sunkoshi River and divert a discharge of 67 cubic meters per second through the tunnel to Kusumtar located in Ward 6 of Kamalamai Municipality. A powerhouse will be built on the Marin River to generate 28.62 megawatts of electricity. A Nepali and Indian joint venture company has been awarded the contract to build the dam and powerhouse of the project. The joint venture (JV) of Nepal's Raman Construction and India's Patel Engineering has won the contract to build the Sunkoshi-Marin diversion dam and power plant for Rs 12.5 billion. The project has already given a letter of Intent (LOI) to the JV company. The contract agreement will be signed within two months, according to the project.

The price of gold has dropped by Rs 1,100 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 105, 800 per tola today. The yellow metal was traded at Rs 106, 900 per tola on Thursday. Meanwhile, the tejabi gold is being traded at Rs 105, 300 per tola. Similarly, the price of silver has remained unchanged and is being traded at Rs 1, 380 per tola today.

While the drive for the merger in the banking sector seems to be gradually settling down with the conclusion of some big mergers and acquisitions (M&As), the consolidation in the insurance sector is in full swing. In the last one year, a series of merger agreements have been signed among both, life insurance and non-life insurance companies. The merger momentum in the Nepali insurance sector intensified after the Nepal Insurance Authority (NIA) increased the minimum paid-up capital requirements for insurers of both categories. The authority has increased the paid-up capital of non-life insurance companies to Rs 2 billion while it is Rs 5 billion for life insurance companies. The authority has been pushing for consolidation in the Nepali insurance sector since the new Chairman Surya Silwal took charge of NIA. Of the 19 insurance companies involved in the merger process, six companies have merged to become three and have started their integrated business while 13 others are still in the process of completing their merger process. According to NIA, 10 non-life insurance companies have signed merger MoUs to become five, while nine life insurance companies have also signed merger deals to become four entities. So far, two life insurance companies and 4 non-life insurance companies have completed the merger process and started their integration business. The remaining seven life insurance companies and six non-life insurance companies have not been able to start integrated businesses yet. There have been two successful mergers in the non-life insurance sector in the past year. In July 2022, Himalayan General Insurance and Everest Insurance merged to form Himalayan Everest Insurance Insurance Co. Ltd. Similarly, in October, Sanima General Insurance and General Insurance Company merged to form Sanima GIC Insurance Ltd. The first merger among the life insurance companies took place in the last week of December 2022 when two life insurance companies - Surya Life Insurance and Jyoti Life Insurance - completed their merger process and started integrated business as Suryajyoti Life Insurance Company. While other companies have signed merger agreements, they are yet to take their merger process to a conclusion. Among the non-life insurance companies, Premier Insurance and Siddharth Insurance, Sagarmatha Insurance and Lumbini Insurance, and United Insurance and Azod Insurance have yet to complete their merger process. Ajod Insurance signed a merger agreement with United Insurance on January 11. The Ajod-United merger initiative came after Ajod's unsuccessful merger attempt with Prabhu Insurance. In the life insurance segment, the merger of Prime Life Insurance, Gurans Life Insurance, and Union Life Insurance is yet to be completed, though the companies have said that they are in the final stage. These three insurance companies on January 16 have signed a final merger agreement to form Himalayan Life Insurance Company Limited. Two other mergers in the life insurance sector - between Mahalakshmi Life Insurance and Prabhu Life Insurance, and Reliance Life Insurance and Sanima Life Insurance - are yet to be completed. Currently, there are 19 life insurance and 20 non-life insurance companies operating in Nepal. After the completion of ongoing merger processes, the number of life and non-life insurance companies will come down to 15 each. According to Shambharaj Lamichhane, Deputy Director of NIA, the merger process of all these companies will be completed by mid-March 2023. "As mergers are a new practice in the insurance sector, there could be some delay in starting the integrated business," he said. Mahalakshmi Life Insurance CEO Ramesh Kumar Bhattarai said that the merger in the insurance sector is a big challenge. "The valuation of the merging entities needs to be carried out by bringing actuaries from India. That is why the integrated business of many companies get delayed," he said.