Module 4 — Regulatory & Policy

Regulatory & Policy Pulse Index

Live tracking of Nepal's regulatory environment for infrastructure developers, DFI analysts, and carbon-credit originators. Every event is sourced and dated.

FATF Grey-List Status — Blacklist Risk Escalation

Grey-listed Feb 21, 2025. 15-point action plan. APG delegation visited May 18–20, 2026 and explicitly warned of blacklist risk. NRA report still incomplete. Deadline: February 2027.

Section A

Regulatory Impact Timeline

Key regulatory events affecting Nepal's investment and infrastructure landscape, ordered chronologically with impact severity.

Feb 2025HIGH

FATF Grey-Listing

Nepal placed on FATF grey list. 15-point action plan. 2-year deadline.

Early 2025HIGH

Supreme Court Hydro Ruling

242 projects (16,735 MW) in protected areas face legal uncertainty.

Dec 2025MEDIUM

NRB Policy Rate Cut

Rate cut from 4.50% to 4.25%. Easing cycle continues.

Mar 2026HIGH

NEA Unbundling Announced

Government splits NEA into generation/transmission/distribution. 30-year structural reform.

Apr 2026MEDIUM

SEBON Chair Resignation

Fourth chair in two years. 32 hydropower companies stuck 22+ months.

May 2026HIGH

LDC Deferral Filed

Formal request to postpone graduation to November 2029.

May 2026HIGH

APG Blacklist Warning

APG delegation explicitly warned Nepal of blacklist risk during Kathmandu visit.

Section B

Key Regulatory Metrics

Core indicators drawn from the Intelligence CMS. Each metric is sourced, dated, and reviewed by the Dashboard Team.

FATF Action Plan Points

15points

Source: FATF / APG · Updated: May 20, 2026

FATF Grey List Status

Grey-Listed

Source: FATF / APG · Updated: May 20, 2026

FITTA Approved Sectors

102sectors

Source: DoI / FITTA 2019 · Updated: May 26, 2026

LDC Graduation Deferral

Filed May 13, 2026

Source: UN CDP / Government of Nepal · Updated: May 13, 2026

NEA Unbundling Status

Announced

Source: Government of Nepal / MoEWRI · Updated: Mar 30, 2026

Section C

LDC Graduation Monitor

Nepal's Least Developed Country graduation status — deferral request, economic impact, and DFI implications.

LDC Graduation — Deferral Pending

Status

Formal deferral request filed May 13, 2026

Requested Postponement

November 2029

Approval Authority

UN CDP approval required — original November 2026 deadline stands until confirmed.

Economic Impact (ILO Estimate)

  • 132,000 jobs at risk
  • ~USD 1 B GDP loss over 5 years
  • 2.5–4.3 % of exports affected

DFI Context

LDC graduation removes preferential tariff access and automatic additionality shield for carbon credits.

Source: UN CDP / ILO / Government of Nepal · Updated: May 13, 2026

Section D

Cross-Border Trade Policy

Key investment and trade frameworks governing foreign capital, power exports, and infrastructure thresholds.

Trade & Investment Policy Register

PolicyCurrent StatusImpact LevelKey Detail
FITTA 2019102 sectors open to FDIMediumForeign Investment and Technology Transfer Act
India Power TradeActive via PPA mechanismHighNEA and Indian counterparts
Cross-Border TransmissionButwal–Gorakhpur 400 kV under constructionHighEnables 1,500 MW export capacity
Investment Board NepalActiveMediumProjects above NPR 6 B threshold

Source: FITTA 2019, NEA, Investment Board Nepal · Updated: May 2026

Section E

Compliance Checklist

Essential regulatory requirements for infrastructure and energy projects in Nepal.

FATF / AML

  • RBeneficial ownership disclosure
    Required
  • RCustomer due diligence
    Required
  • RSTR filing
    Required

Companies Act

  • RBoard composition
    Required
  • RAGM requirements
    Required
  • RAuditor appointment
    Required

FITTA

  • RRegistration with DoI
    Required
  • RRepatriation approval
    Required
  • OTechnology transfer agreement
    Recommended

Environmental

  • RIEE / EIA approval
    Required
  • RForest clearance
    Required
  • RWater use permit
    Required

Source: NRB, Companies Act 2063, FITTA 2019, MoFE · Updated: May 2026

Section F

Open Consultation Tracker

Public regulatory consultations and comment periods from Nepal's financial and energy regulators.

Active regulatory consultations will be listed here as they are published by SEBON, NRB, and MoEWRI.

Updated via the Intelligence Console by the research team.

Navigating Nepal's regulatory landscape?

Our Legal & Regulatory Affairs and Regtech committees can provide compliance assessments tailored to your project structure.