KATHMANDU:  The Investment Board Nepal has approved an investment proposal of South Korea’s Motrex to establish a car manufacturing and assembly plant in Nepal.

A board meeting of the IBN, chaired by Nepali Prime Minister Sharma Oli on Friday approved the proposed investment of 10.54 billion Nepali rupees (95 million U.S. dollars), the IBN said in a statement. IBN is the official investment board of the government of Nepal.

Officials at the IBN said on Saturday that the South Korean company had submitted its proposal three months ago and it was approved on Friday.

“Following the approval from IBN board, the South Korean company can invest in Nepal by signing project investment agreement (PIA) with IBN,” Balaram Rijyal, spokesperson of the IBN told.

The PIA is a document that defines terms of investment  between Nepali government and the investor.

IBN officials said that the South Korean company has proposed producing four wheelers, particularly passenger cars and electric vehicles. Nepal does not have any vehicle assembly plant currently and the country imports all the vehicles with both four wheelers and two wheelers.

As per the proposal of Motrex, the company will start producing vehicles from 2021, first by producing around 2,000 vehicles in a year.

“The company will produce 20,000 vehicles by 2027,” an IBN official added.