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Whatever happened to Nepal's diaspora bonds?

Submitted by Dilip Ratha, co-authors: Ani Silwal on Wed, 01/19/2011 - 19:14
Kathmandu, Nepal. Photo: © Simone D. McCourtie / World Bank

You might recall that the finance minister of Nepal announced in the annual budget in July 2009 that the government would issue a diaspora bond to raise funds for infrastructure development. Indeed Nepal Rastra Bank followed through in June 2010 by floating a “Foreign Employment Bond”. Although the initial goal was to issue Rs. 7 billion (about $100 million), Rs. 1 billion was floated in the first round. Nepali workers in Qatar, Saudi Arabia, UAE, and Malaysia could buy the bond from one of seven licensed money transfer operators in denominations of Rs. 5,000 (about $65).

Data are hard to come by, but the funds raised have been minuscule, nowhere near target. Apparently, the name of the bond had nothing to do with its unsuccessful launch! 

Nepal announces a diaspora bond

Submitted by Dilip Ratha on Thu, 07/30/2009 - 17:33

Excerpt from the budget speech (July 13, 2009, para 139) by the Nepal finance minister for the new fiscal year beginning this month:

"An arrangement has been made to issue "Infrastructure Development Bond" of an amount of Rs. 7 billion by Nepal Rastra Bank fixing pegged exchange rates targeting the Nepalese working abroad through Nepalese Embassies in South Korea, Malaysia, United Arab Emirates, Saudi Arabia and Qatar, as a part of domestic borrowing for the coming fiscal year. Such Bonds can be purchased only from workers working abroad. From this arrangement, the remittance can be used for infrastructure development and the remittance itself remains free of additional charges while transmitting to Nepal. In addition to it, I am confident that such workers employed abroad will receive interest from the day of bond purchase and be benefitted."