The Karnali Basin Area is home to several high value agricultural products, including herbs, spices, fruits and vegetables. There is an opportunity to leverage, and build on, several ongoing government and development partner initiatives (including the USD 68 million Agriculture Sector Development Programme (ASDP), focused on promoting value chain activities in agribusiness sector. Commercialization and value addition are currently the key challenges facing the agriculture and the agribusiness sector.

Within agribusiness, the potential of the herbal sector (a range of herbal plants with medicinal and cosmetic value) needs to be further explored and discussed in its own right. The Karnali Basin Area is home to a large variety of natural herbs and medicinal plants (few examples include Yarshagumba, Kutki, Sarpagandha and Jatamansi). Nepalgunj, a major city located in Banke district, is a major hub for herbal trade and processing as more than 1 in 5 herbal industries in Nepal is located here. Similarly, Nepalgunj also houses the headquarters of Jadibuti Association of Nepal (JABAN) with more than 300 members. There exists a unique opportunity to work with the association and the specific private sector players in this space to move towards further processing and value addition of these herbs.

The area houses several watersheds including the Karnali River, with the potential to produce thousands of MWs of electricity. In recent years, several national and international investors have sought permits to generate electricity from the rivers and tributaries. While some of these are controversial, many have also garnered significant attention from the locals and the government. Thus, responsibly investing in energy-generation projects, particularly in hydropower, with environmental, social and governance (ESG) focus would generate both economic and conservation returns for the Nepalese economy. Energy and infrastructure development lie at the nexus of job creation, poverty reduction, and broader economic development – serving as a foundation on which several other industries and sectors can play a more meaningful role.