Hedging Regulations 2075 (2019)
The Government of Nepal ("GON") by virtue of the power conferred by Section 22 of the Foreign Exchange (Regulation) Act 2019 (1962) has issued the Hedging Regulations 2075 (2019) ("Regulation"). The Regulation was approved by the Cabinet on Poush 15, 2075 (December 20, 2018) and was published by Nepal Rastra Bank ("NRB") on Falgun 7, 2075 (February 19, 2019). The purpose of the Regulation is to ensure risks relating to exchange control to the parties involved in various types of projects in Nepal.
The Regulation provides that the GON may provide hedging facility to any of the following projects which has obtained foreign loan:
- Hydroelectricity projects with a capacity of 100 MW or more;
- Construction of electricity transmission lines with capacity of 220 KVA or more and extending in length for more than 30 kilometers;
- Construction of rail, metro and mono railways extending in length for more than 10 kilometers;
- Construction of fast-track roads extending in length for more than 50 kilometers; or
- Other projects as specified by the Council of Ministers, GON.
A project company wishing to avail hedging facility must first obtain an approval to bring in foreign investment and foreign currency in accordance with the prevailing federal laws. Thereafter, the project company must submit an application to NRB to obtain the hedging facility.
Click here to download pdf version of the Regulation.