Finnfund's EUR10mn Investment in WorldLink Aims to Bridge Nepal's Digital Divide

Finnfund, a development financier, has invested EUR10mn (USD10.5mn) in Nepal's largest internet service provider, WorldLink Communications, to expand the country's fibre network and build its first Tier III-standard data center. This investment is aimed at bridging the digital divide and enhancing connectivity in Nepal, especially in rural areas. Despite the growing potential, the Nepalese telecom sector faces significant risks, including elevated taxation, dependency on foreign markets for bandwidth, and challenges posed by the departure of international operators from the market. As of the end of 2023, Nepal had around 3.1 million fixed broadband subscriptions, with fibre connections dominating due to the limited copper wireline infrastructure. The investment seeks to address the funding gap left by recent market exits, but industry risks could affect the pace of return. Furthermore, with underdeveloped data infrastructure, Nepal aims to establish itself as a backup destination for data center projects, although this is not expected to occur in the short term due to resource availability in neighboring countries like China and India.