Smart city—which is relatively new in the context of Nepal is estimated to unlock the market potential of nearly US $20 billion by 2033.

As per National Urban Development Strategy 2017, the country plans to develop each smart city in seven provincial capitals. Similarly, it also aims to build four modern new towns in Kathmandu, Lalitpur, Bhaktapur and Kirtipur.

In order to gear up the smart city development project in Kathmandu Valley, the Kathmandu Valley Development Authority (KVDA) is working on preparing Detailed Project Report that will be on the table by early 2019. In addition, it (KVDA) has also allotted US $1.6 million for the DPR of the first phase of this smart city program.

Nepal’s move to build smart city is presenting enormous investment opportunities for global smart city market players.

According to International Finance Corporation, Nepal has investment potential of US $3.4 billion in green building, US $10 billion in transport infrastructures, US $ 2.5 billion in electric vehicles, US $83 million in municipal waste management and US $686 million in smart urban water by 2030. These investment opportunities will also satisfy nation’s climate targets set as per Paris accord.

Considering the immense opportunities offered by Nepal in smart city sphere, South Korea recently committed to extend cooperation and is willing for economic investment. As per its commitment to develop smart cities in Nepal, it will be investing in Kathmandu and Pokhara followed by four other municipal cities.

Moreover, to attract domestic or foreign investment in smart city, the government of Nepal is opting for Pubic Private Partnership (PPP) model to bridge the funding gap. The entire project requires funding of US $1.3 billion annually of which US $1 billion represents funding gap. Hence, to accomplish the project, the country aims to raise 80% fund from private sector and 20% from public sector.

Besides lucrative opportunities to investors, the development of smart city will contribute significantly to the transformation of economy of this Himalayan nation. It is because City-as-Customer Kathmandu alone is estimated to contribute nearly 45% of nation’s GDP by 2025. It means investment in smart cities is featuring as one of the promising factors that is likely to help Nepal to graduate as lower-middle-income nation by 2030.

For more information on “Nepal’s Macro Environment and Key Industry Prospects, 2017–2022” please visit https://store.frost.com/nepal-s-macro-environment-and-key-industry-prospects-2017-2022.html


Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at subarna.poudel@frost.com


Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830