Joint venture and technology transfer

Project

A project is a temporary endeavour, with a definite start and end, undertaken by a team to create a unique product, service or result within limited time, cost and quality constraints. Examples: building the Kathmandu-Terai Fast Track, a 100 MW hydropower plant, a bridge, or developing a hospital information system.

Joint venture project and technology transfer

A joint venture project is one in which two or more organisations, usually a local and a foreign partner, combine capital, technology and management for a specific project and share profit, loss and control according to an agreement.

Technology and capital transfer

• The foreign partner brings advanced technology, machinery, design skill and often capital.
• The local partner brings land, local knowledge, labour, permits and market access.
• Local engineers and workers learn new methods by working with experts, so skills and know-how are transferred.
• Capital flows in through the foreign equity share and loans, and a part of the profit remains in the country.
• A training clause and a plan to hand over operation to local staff make the transfer effective.

Example: a Nepali company and a foreign hydropower developer form a joint venture to build a 100 MW plant. The foreign partner supplies turbines, design and finance; the Nepali partner handles licences, land and civil works. Nepali engineers are trained in operation and maintenance, and after the agreed period the plant is handed over to Nepal.