KATHMANDU, Dec 6: The government’s cumulative investment in public enterprises (PEs) has reached Rs 930.88 billion by the end of fiscal year 2024/25, yet most entities continue to deliver poor financial returns, according to the Public Debt Management Office (PDMO).
The Annual Report on Share and Loan Investment of the Government of Nepal released by the PDMO shows that the total investment includes both equity and loans extended to 159 state-owned entities.
Of the total, share investments in 116 public entities stood at Rs 404.81 billion. Nepal Electricity Authority (NEA), Civil Aviation Authority of Nepal (CAAN), Nepal Telecom, Rastriya Banijya Bank and Agricultural Development Bank account for the largest equity holdings.
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Similarly, the government’s loan investment reached Rs 526.06 billion. Of this, Rs 158.18 billion came from internal sources while Rs 367.88 billion originated from foreign sources. NEA, Kathmandu Valley Water Supply Management Board, CAAN and Nepal Water Supply Corporation are among the entities with the highest outstanding loan liabilities.
According to the PDMO, the government recovered only Rs 2.62 billion in principal and Rs 5.29 billion in interest in the last fiscal year. During the same period, fresh investments totalled Rs 41.48 billion—Rs 5.52 billion in equity and Rs 35.95 billion in loans.
Despite the substantial investments, returns from PEs remain weak. Many entities fail to repay principal and interest on time, causing their liabilities to accumulate. As of FY 2024/25, outstanding dues to the government had reached Rs 400.08 billion, including Rs 259.19 billion in principal and Rs 140.88 billion in interest. NEA, the Kathmandu Valley Water Supply Management Board, Nepal Water Supply Corporation and CAAN hold the largest arrears.
Further highlighting the poor performance, the Annual Performance Review of Public Enterprises 2025 shows the government earned only a 2.4 percent return on its share capital invested in PEs in FY 2023/24. Of the 44 public enterprises currently under government ownership, 15 are operating at a loss while three remain inactive, according to the Ministry of Finance.
Citing persistently low returns and mounting liabilities, the government has initiated the privatization process for four troubled entities: Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Metal Company and Nepal Orind Magnesite. In addition, Gorakhkali Rubber Udyog, Udayapur Cement Udyog and Hetauda Cement Factory have been listed for potential privatization.
