BY Our Reporter

Nepal Electricity Authority has issued a white paper showing its deteriorating financial situation.

At a press conference organised to release the white paper on Friday, Managing Director Hitendra Dev Shakya said that the loss of Authority amounts Rs. 5.26 billion. However, former Managing Director Kulman Ghising was showing profits amounting to Rs. 9 billion until he was leading the government entity.

Shakya was appointed MD of the state entity on March 24 by sacking Kul Man Ghising. 

Shakya said, "The white paper has been issued to make the authority's plans in the coming days and to evaluate the work to be done during my tenure."

He said, "This was also necessary for the performance evaluation that was carried out as soon as I assumed the responsibility of the Managing Director."

The total cumulative profit till the fiscal year 2023/24 was claimed to be around Rs. 46.47 billion, and the profit by mid-March 2025 of the current fiscal year has been recorded at Rs. 9.48 billion, he said.

However, when calculating the profit and loss including the claim for accelerated depreciation as per the provisions of the Income Tax Act, it appears that the total loss so far has been Rs. 5.26 billion.

MD Shakya said that a process of taking a short-term loan of Rs. 10 billion has been taken forward as the balance in the NEA's account is quite insufficient.

"While we are currently showing assets of Rs. 644 billion and also showing profit, the NEA does not have any cash balance," Shakya said, 'That is why we have taken forward the process of taking a short-term loan of Rs. 10 billion for the payment of dues."

The NEA has to pay Rs. 32.5 billion, including Rs. 29.5 billion as interest on loan to the government of Nepal and Rs. 3 billion for electricity of Tanakpur.

He said that although the projected revenue source of the Authority for the fiscal year 2024/25 is Rs. 199.02 billion, the approved budget expenditure for 2024/25 is Rs. 228.77 billion.

 "Out of the said budget deficit of Rs. 29.75 billion, Rs. 14.65 billion was to be reimbursed from the government of Nepal for previous years, Rs. 8.26 billion was to be received from the recovery of arrears of dedicated feeders and trunk lines, and the remaining Rs. 10 billion was to be met by issuing bonds," he said.

He also said that the projected revenue seems to have overestimated the electricity sales.

Shakya said that due to the damage caused to various production centers by the floods in September last year, exports, as well as domestic sales, have decreased, so actual sales are expected to amount to only around Rs. 18 billion or even lower than that.

Similarly, the white paper also mentions that the Authority has a long-term debt of Rs. 248.12 billion. Of this, Rs. 77.8 billion is from the internal resources of the government of Nepal and Rs. 171.4 billion is from foreign donor agencies under the guarantee of the government of Nepal.

The white paper mentions that the total liability of the Authority is around Rs. 385 billion. In addition, the Authority's financial commitments and potential liabilities until 2023/24 were Rs. 69.57 billion.