Social Security Fund Prioritizes Energy and Infrastructure Sectors to Diversify Massive NPR 111 Billion Deposit Base
The Social Security Fund (SSF), managing a massive deposit base of over NPR 111 billion, has announced a major shift toward financing national infrastructure projects, including hydropower, solar energy, and clinker production. Moving away from passive bank deposits to maximize economic growth, the fund has established strict risk-mitigation guidelines, such as capping power project investments to a minimum capacity of 20 megawatts and requiring a minimum of 30 percent equity.
The implementation of the upcoming fiscal year’s budget policy has opened up a clear legal framework for the Social Security Fund (SSF) to deploy its vast pool of public capital into productive economic sectors. To safeguard its contributors' wealth while financing national development, the SSF Board of Directors has established precise credit and risk management guidelines. The fund is prepared to offer fixed capital, working capital, or revolving credit facilities across tourism, construction, IT, services, and agricultural sectors, provided companies display high repayment capacities backed by adequate corporate collateral or state guarantees. However, risk aversion remains a central theme in the fund's infrastructure policy. Director Regmi emphasized that the SSF will strictly avoid investing in any electricity project with an output capacity below 20 megawatts, or projects managed entirely by private entities. Furthermore, funding will be denied to power projects with conditional Power Purchase Agreements (PPAs), projects lacking a completed substation connectivity framework under the Nepal Electricity Authority (NEA), or any venture that fails to maintain at least a 30 percent equity base.