Submit your Article

Economist Bishwo Poudel has assumed the office of the Nepal Rastra Bank (NRB) as its 18th Governor on Tuesday. His appointment, following nearly one and half months of leadership vacuum and a politically charged process, has placed him under intense scrutiny.

As a former Nepali Congress (NC) parliamentary candidate, Poudel steps into a role that demands not only economic acumen but also a clear demonstration of independence. He must now navigate a complex landscape shaped by political expectations, economic stagnation, and international obligations. The challenges ahead are significant and will require bold, balanced, and credible policy responses to restore confidence, revive growth and protect the NRB’s integrity as an autonomous institution.
 

Poudel’s political background has reignited concerns about the politicization of the NRB governorship—a role that, while historically influenced by political appointments, is expected to rise above party interests. The prolonged selection process reflects a troubling prioritization of political loyalty over institutional continuity. For Poudel, the first and perhaps most important test is to assert his independence. He must earn public and investor trust by making transparent, evidence-based decisions that put the country’s economic well being above political considerations. Failing to do so risks deepening skepticism about the central bank’s autonomy and complicating efforts to stabilize the economy.

One of the most urgent challenges before him is reviving credit growth. Although more than Rs 600bn in investable funds are sitting idle in the banking system and interest rates are at record lows, credit disbursement has remained weak for the past many months. This signals a deeper issue: a lack of confidence among borrowers and subdued demand for investment. The resulting liquidity trap has stifled economic activity and blunted the impact of monetary policy. To address this, Poudel will need to introduce targeted measures to stimulate lending. This could include easing regulatory barriers, supporting innovative financial products, and channeling credit into high-potential sectors such as agriculture, tourism, and small and medium enterprises (SMEs). Working closely with banks and financial institutions to better assess and manage lending risks can help mobilize this idle capital into productive use, while unlocking growth and job creation.

Another critical issue is Nepal’s inclusion on the Financial Action Task Force (FATF) greylist because of the shortcomings in anti-money laundering (AML) and counter-terrorism financing efforts. This designation will damage Nepal’s global financial standing, discourage foreign investment and hamper integration with international markets. The new governor must work closely with the Ministry of Finance and relevant regulatory bodies to strengthen the AML framework, enhance enforcement and ensure alignment with international standards. Removal from the greylist would not only restore investor confidence but also signal the NRB’s capacity to meet complex global obligations.

Despite a relatively strong external sector—marked by healthy remittance inflows, solid foreign exchange reserves and a balance of payments surplus—domestic economic activity has remained sluggish since the lifting of the post-covid stimulus. This disconnect highlights deeper structural challenges such as bureaucratic red tape, policy uncertainty and weak engagement with the private sector. Poudel must prioritize efforts to rebuild private sector confidence. Targeted incentives, such as credit guarantees for SMEs or support for green investments, could stimulate private sector involvement and energize the real economy. It is important to strike the right balance: reviving growth without stoking inflation, and implementing short-term stimulus that aligns with long-term development goals.

By promoting forward-thinking policies and fostering collaboration across institutions, Poudel has the chance to steer Nepal’s economy toward. His legacy at the central bank will be defined not just by the policies he takes, but by his ability to preserve the central bank’s independence and credibility.

Lawmakers are divided over China CAMC Engineering Co Ltd (CAMC) dismissing the parliamentary sub-committee’s report on the construction of Pokhara Regional International Airport. While some parliamentarians have called the statement an attack on Nepal’s sovereignty, others have defended the company and questioned the integrity of the report itself.

CAMC, the Chinese state-owned company responsible for building the airport, issued a statement on Tuesday dismissing the Public Accounts Committee (PAC) sub-committee’s report, which alleges serious financial and procedural irregularities worth approximately Rs 10bn. The company claimed the report was “riddled with factual inaccuracies” and lacked professional and objective analysis. It further asserted that CAMC had fully complied with all legal and regulatory requirements throughout the project.

Speaking at the PAC meeting on Wednesday, Rajendra Lingden, chairman of the sub-committee and leader of the Rastriya Prajatantra Party, said CAMC’s statement was misleading and amounted to an attempt to undermine Nepal’s sovereign Parliament.

“It is unacceptable for a company involved in a state project to publicly question the findings of a parliamentary body,” Lingden said. “The statement has drawn my serious attention, and I urge fellow lawmakers to treat it with due gravity. This is an attempt to tarnish the image of Parliament.”

However, not all lawmakers shared Lingden’s view. CPN-UML leader and former Minister for Culture, Tourism and Civil Aviation, Yogesh Bhattarai, criticized the sub-committee’s report as incomplete and misleading.

“Our report claims there are technical flaws in the airport, which would warrant its closure. But determining technical viability is not within the sub-committee’s jurisdiction,” said Bhattarai. “The International Civil Aviation Organization (ICAO) has already certified Pokhara Airport for ‘4-D’ category flights. If aircraft are landing and taking off, how can we say it's not fit for operation?”

Bhattarai also cautioned against mishandling foreign investment. “Like with the MCC, we must consider diplomatic sensitivities. China will not quietly accept this report that questions the integrity of its investment.”

UML lawmaker and sub-committee member Gokul Baskota described the report as “incomplete” and said his input was not a dissent but a supplementary opinion.

“Some crucial data was not uncovered, and written queries to concerned agencies were never conducted. The Ministry of Finance did not respond either. That’s why I say the report has everything and yet nothing—it still needs more work,” said Baskota. He noted that he is willing to provide further evidence if requested but has no objection to the current version being endorsed. “My only point is that further study is necessary.”

PAC directs CIAA to investigate the case

Following Wednesday’s deliberation on the report presented by its sub-committee on alleged irregularities in the Pokhara airport project, the PAC has instructed the Commission for Investigation of Abuse of Authority (CIAA) to investigate the case. 

Following a four-hour-long discussion, PAC Chairman Rishikesh Pokharel announced that the committee had accepted the report presented by the sub-committee led by Lingden, as well as supplementary opinions by its members. He also informed about the committee’s decision to forward the report to the CIAA.

“The sub-committee’s report raises 15 crucial questions, and we have incorporated these questions as part of our formal decision and have resolved to send the report to the commission for further investigation,” said Pokharel.  

Former Minister of International Development and Minister of Environment of Norway, Erik Solheim, attended the inaugural edition of Sagarmatha Sambaad at the invitation of the Nepal government. A seasoned diplomat, Solheim has also served as the under-secretary-general of the United Nations and the executive director of the United Nations Environment Program. Kamal Dev Bhattarai and Pratik Ghimire of ApEx interviewed him about climate change impacts in the Himalayas. Excerpts:

What drew you to Sagarmatha Sambaad?

I was invited by Prime Minister KP Sharma Oli. I met him a few months back and he said we are finally making the summit happen. The event had been postponed due to the Covid-19 pandemic. So, the prime minister was very eager, and I said, yes, for sure I want to come. And the main reason is of course that the melting of the glaciers in the Himalayas, which is of enormous importance to the world. These glaciers are feeding all the major rivers. Ganga, Brahmaputra, the Mekong, the Indus, they are all fed by the melting of the Himalayas. And the impact, if this is disturbed, will be enormous. If you take India, China and Pakistan, there are maybe 2bn people living in this region. So, this is one of the most important environmental issues in the world, and it’s very good that Nepal is taking the lead to put this issue on the agenda.

Do you think that this kind of summit could help shape the global perspective, or global discourse on climate change and sustainability?

One summit of course will not change everything in the world. But if you sustain the topic, have more summits, and really bring it into the different global processes, I think it will have a massive impact. Because this is also the third pole. You have the north pole where we live in Norway, you have the south pole in Antarctica, and this is the third pole, with all the ice and snow in the Himalayas. So, to get that perspective out to the world, I think this summit was very important.

Can this kind of event be a common voice for mountainous regions and mountainous countries? 

Absolutely, because the issues are the same. Of course, the Himalayas is the number one mountain region in the world, but I’ve been many times to, say, Bolivia in the Andes. In Bolivia, you see skiing tracks, which were built at a time when there was snow to bring tourists. Now, the skiing tracks have no snow. They are just standing there with no use. So, the issues are the same in the Andes, in the Alps, and in many other mountain ranges. But the Himalayas is the most important, the biggest amount of snow, the highest number of people being impacted. 

As a former UN Environment chief, you have been in many kinds of climate dialogues. Do you think these kinds of dialogues really help in real world climate actions?

It works only if you can trigger action, and the government can set the direction for action. But you also need business and civil society groups and others to act. What I think is very important is not just to see climate change as a problem, but also as an opportunity for innovation and economic growth. One example is, of course, now over 70 percent of cars in Kathmandu or Nepal are electric. Well, that’s very good for fighting climate change. But it’s also very good for the people here. These cars are more modern, better, higher quality, more tech. They will reduce pollution. Kathmandu is in a valley, as you know very well that you don’t have a lot of wind to remove pollution. It will stay on. So it makes sense to embrace electric vehicles. Nepal is now next to Norway, with the world's most electric cars. Sure, there is China, but China is so big. So in terms of percentages, Nepal is really leading the world. Again, looking for what’s beneficial, both economically and for the environment, electric cars are much cheaper because you spend less money.

Are you really hopeful about the direction the world is heading in terms of climate action?

I think the world is heading in the right direction, but not mainly because of the diplomatic talks, but mainly because of the action of business. Look, China last year added 300 gigawatts of solar energy to the grid. That is 100 times Nepal's entire hydro power grid. So this is enormous. In India, Prime Minister Narendra Modi just launched a scheme for 10m rooftops with solar. Again, that’s huge. And China and India both have understood that climate and environment is not just a problem, but also an opportunity. Now most electric cars in the world are Chinese. This benefits the Chinese economy and environment. It’s the same thing in India. With Modi launching the solar industry in India, it benefits the economy and environment.

What adaptation strategies would you recommend for vulnerable and mountainous countries like Nepal?

Number one, going big on renewables. Hydropower is already big, but there’s a huge potential for more hydropower in Nepal, and that’s also a potential for huge export earnings if you sell it to India. Going big on solar, and then doing even better to protect nature, can also bring economic opportunities. I know that there are disputes in Nepal about the number of tigers, but Nepal has doubled the number of tigers. That can be turned into a draw for tourists, because tourists really want to come and see tigers. You get good jobs while protecting nature at the same time.

We have often heard you talking about green growth. How can developing nations like Nepal grow their economies without repeating the environmental mistakes of the already developed or industrial countries?

The main issue is to understand that renewables are now the cheapest anywhere in the world. In the past, every nation that wanted to grow its economy depended on coal energy. It started in the United Kingdom and spread to Germany, to the United States, to Japan, to China. But now if you switch from coal to solar, you save money. Solar is cheaper. That means a new development path is possible. So for Nepal to really root its economic development in electric vehicles, solar panels, hydropower, that will make a very different pathway forward. Less polluting, but also cheaper and better.

Nepali leaders frequently say that the international community is not paying attention to the impact of climate change on Nepal’s Himalayas. This is one reason the Nepal government organized Sagarmatha Sambaad. Do you agree with this claim?

I think the prime minister and other leaders are right that the support from the international community hasn’t been sufficient. And I think Nepal is very right to put this much more front and center by organizing the Sagarmatha Sambaad.

What are your suggestions for Nepal so that the international community could hear this issue? 

It should organize more events in other parts of the world. We have the climate talks in Belém, Brazil. We have the UN General Assembly. We have Davos, the World Economic Forum. We have dialogues in neighboring countries. We have the Raisina Dialogue in Delhi. We have the Boa Forum in China. These are major events where lots of people are coming together. And the Nepal government, with its Indian, Chinese and European partners, could organize many more events putting Nepal and the Himalayas at the center.

The Nepal government had expected for heads of state and government to join the dialogue, but that didn’t happen. What could be the reasons?

Well, I think right now, many leaders are focused on other issues. Chinese President Xi Jinping, for example, is focused on trade and conflict issues with the United States. Prime Minister Modi has, of course, been very focused on the conflict with Pakistan. But the very high level, I mean, the Minister of Environment came from Delhi. A Central Committee member of the Chinese Communist Party did attend the dialogue. Certainly, it will be good to attract even more high level representatives in the future, and I’m sure that can happen. 

Since Nepal and Norway are long-time partners, how do you see the current status of these countries’ collaboration on environmental and climate issues?

Norway has supported a number of climate activities in Nepal. A very obvious area is hydropower, because Norway is a big hydropower nation, and so is Nepal. So to look into all opportunities to engage Norwegian companies in sharing the best practice or investing in hydropower in Nepal I think would be a huge, huge opportunity. But there are also others. Hydropower is the biggest opportunity, because Norway has much less. Besides that, anything related to tourism. Nepal has huge tourism potential. I mean, all it has is tourists, but it can get more. So finding ways of getting more value from the tourists, charging them more so you get more and more value, but also, of course, organizing tourism in such a way that it has the least impact on nature.

China CAMC Engineering, the contractor for the Pokhara Regional International Airport, has strongly rejected a report by a subcommittee of Nepal’s Public Accounts Committee (PAC), which alleges significant irregularities in the airport’s construction. The Chinese state-owned enterprise criticized the report for being riddled with factual inaccuracies and lacking professional, objective analysis of the project’s implementation.

Calling the report profoundly shocking and gravely concerning, the company stated: “As a professional and responsible international engineering contractor, we strictly complied with all legal and regulatory requirements of the Nepal government throughout the bidding, contracting, and implementation phases.”

The PAC subcommittee, chaired by Rastriya Prajatantra Party (RPP) Chairman Rajendra Lingden, concluded that irregularities and corruption worth approximately Rs 10bn occurred during the airport's construction. The draft report outlines discrepancies across 11 categories. Several subcommittee members have signed the draft, which is now being circulated among lawmakers for review.

The alleged irregularities in the airport construction could be among the largest corruption scandals in Nepal’s history. According to the subcommittee, the cost of the airport—originally estimated at
Rs 14bn—was suspiciously inflated to Rs 22bn. The report alleges widespread malpractice affecting nearly all aspects of the project, raising serious concerns about quality control and regulatory compliance. It also highlights violations of the original contract terms, particularly regarding tax exemptions. The report states that a new implementation agreement enabled repeated tax waivers totaling Rs 2.22bn, which it describes as “deliberate financial misconduct,” resulting in significant revenue loss for the state.

Reacting to CAMC’s rebuttal, a member of the subcommittee expressed concern over the company’s statement and said the committee would respond formally after internal deliberations.

Despite the controversy,  CAMC said the airport is Nepal’s most modern international airport. The company added that the airport has operated stably for 28 consecutive months, with passenger traffic reaching 904,771 in 2023 and 989,852 in 2024—both exceeding its designed annual capacity of 800,000 passengers. It has also urged the Nepali authorities to investigate the unauthorized disclosure of the report, correct its alleged inaccuracies, and restore the truth.

Pokhara International Airport was inaugurated on 1 Jan 2023, amid considerable fanfare. Though the project predates Nepal’s entry into China’s Belt and Road Initiative (BRI), China later included it within the BRI framework, erupting a diplomatic brouhaha between Nepal and China. The airport was constructed under a soft loan from China, but it is currently failing to generate enough revenue to repay the loan.

The airport faces an annual interest payment of $3.2m. Officials say it would need to generate at least Rs 1.5bn annually just to sustain operations. Even if operated at full capacity, the income would likely be insufficient to cover both operating costs and loan repayments. Some economists argue no proper homework was done to assess the operational side of the airport.

In 2014, Luo Yan, chairman of the China CAMC Engineering Co Ltd, and Ratish Chandra Lal Suman,  director-general of CAAN, had signed a contract worth $215.96m for the construction of the airport.  On 21 March 2016, China Exim Bank and the Government of Nepal signed a government concessional loan (GCL) agreement worth RMB 1.37bn for the project development.

According to AidData, a Washington DC-based research lab, 25 percent of this loan (RMB 355.9m) was interest-free, with a 20-year maturity and a seven-year grace period. The remaining 75 percent (RMB 1.02bn) carried a two percent interest rate, with the same maturity and grace terms. The AidData report also notes that Nepal on-lent the loan proceeds to CAAN through a Subsidiary Loan Agreement finalized on 5 June 2016 at a five percent interest rate, with identical repayment terms.