The globalization has utterly changed the image of the economic world. Financial incapability of a nation is no longer an excuse for not obtaining economic development. If a nation has potential and an environment that counterparts with the interest of global opportunity seekers then it’s easy for nation to attract those opportunity seekers to make an investment in the country. Especially, when this scenario comes to developing nation like Nepal than the role of foreign direct investment (FDI) becomes more precious to speed up the development process of the nation. As a tool to invite FDI, Nepal has the capacity to generate 83,000 MW of hydroelectricity, of which about 43,000 MW is techno-economically feasible (NEA, Annual report 2012). Despite of having abundant of capacity Nepal generated only 700 MW at the end of 2011, and this amount is not even sufficient to fulfill domestic need which is about 1200 MW per year. As a consequence, currently Nepal is suffering through an aggressive power cuts problem which last long 10 to 14 hours per day. Due to financial incapability Nepal is not able to tap the available potential in hydropower and solve the problem of Energy crisis. In this condition FDI is inevitable to bring the solution.
This research took place to find out the possible ways of solution to the problem of Nepal. Finnish firm’s are at the focal point of the research. Both qualitative and quantitative methods were applied to carry out the research. Primary data were collected through formal and informal interviews with professionals. Books, articles, news, journals etc. were reviewed to find out the appropriate secondary data to take the research into the logical conclusion.
With all these combine efforts, research got some useful result. Without FDI it’s terribly hard for Nepal to develop infrastructure to extract energy from hydro resources. At the same time International business hubs and Finnish firms are able and somehow interested in hydropower sector of Nepal. Similarly, Nepal and Finland have quite good diplomatic and business relationship. In other hand, We can see lots of improvements in the FDI condition of Nepal in recent years. If the leadership of Nepal shows a higher level of commitment toward the FDI than it motivates foreign investor to invest in Nepals’ hydropower potential and can exploit the available opportunity for bilateral benefits
