NEA Gets Final Approval to Raise NPR 10 Billion Internal Loan

Kathmandu — The Ministry of Energy, Water Resources, and Irrigation has finally forwarded the Finance Ministry's approval to allow the Nepal Electricity Authority (NEA) to raise NPR 10 billion through internal borrowing. Based on the Ministry of Finance’s decision dated Asar 2, the Energy Ministry has now formally granted permission to NEA to raise the short-term loan.

Though the Finance Ministry had approved the proposal earlier, procedural requirements prevented it from directly writing to NEA. The communication was routed through the Energy Ministry, which had delayed forwarding the letter. This bureaucratic holdup nearly disrupted NEA's plan to secure the loan within the current fiscal year.

Originally, the NEA had proposed a non-competitive borrowing arrangement. However, the Finance Ministry insisted on a competitive interest rate process to ensure fair lending, which nullified the chances of earning any undue financial advantage. This led to the file being deliberately stalled within the Energy Ministry.

With the fiscal year nearing its end, the ministry has now greenlit the borrowing plan. NEA has begun preparations to raise NPR 5 billion from state-owned banks within the current fiscal year, with only four days remaining. The remaining NPR 5 billion is planned for the next fiscal year, potentially involving private banks as well.

This initiative was driven by NEA’s current Executive Director Hiteyendra Dev Shakya, appointed on Chaitra 11 after former chief Kulman Ghising was removed. Shakya highlighted liquidity shortages within NEA and pushed forward the internal loan plan. A government white paper released on Baisakh 19 also acknowledged outstanding contractor payments of NPR 11.61 billion and available central funds of NPR 10.10 billion, underscoring the urgency of the loan.