The Nepal Electricity Authority (NEA) has issued a white paper detailing its current financial status, revealing a severe liquidity crisis despite recording profits and owning assets worth billions.

The white paper, released on Friday by NEA’s newly-appointed Executive Director Hitendra Dev Shakya, shows the NEA has zero cash reserves and has initiated the process of securing a short-term loan of Rs 10 billion to manage its operations.

“Even though we report assets worth Rs 600 billion and have shown profits, the NEA does not have a single rupee in cash,” Shakya said. “This is why we have begun the process of acquiring a short-term loan. Had we had sufficient reserves, this wouldn’t have been necessary.”

Shakya confirmed that a formal request has already been submitted to the government for approval. “We are pursuing this loan solely due to a lack of liquidity,” he explained. “Short-term loans come with high interest rates, but we have no alternative.”

Financial snapshot: Assets, liabilities and losses

According to the white paper, NEA is currently carrying an accumulated loss of Rs 5.26 billion. While its cumulative profit was reported at Rs 46.47 billion up to the Fiscal Year (FY) 2023/24, the profit as of mid-March 2024 stood at Rs 9.48 billion. This figure reflects pre-tax profit.

Despite declaring profits, NEA has never paid income tax. Under Nepal’s law, companies must pay 25% of profits as tax. However, due to provisions in the Income Tax Act—such as a 12-year loss carryforward period and claims of accelerated depreciation—NEA still reports a tax-adjusted loss of Rs 5.26 billion.

The NEA holds long-term loans totaling Rs 248.12 billion, of which Rs 77.08 billion comes from internal government sources and Rs 171.04 billion from foreign development partners under government guarantee.

NEA’s total liabilities currently stand at approximately Rs 385 billion. It also faces financial commitments and contingent liabilities amounting to Rs 69.57 billion.

Potential liabilities from unresolved cases in quasi-judicial and judicial bodies have reached Rs 8.40 billion as of mid-March, 2025. Additionally, NEA has extended institutional guarantees totaling Rs 41.13 billion to support its subsidiaries and affiliated companies.

Infrastructure and asset valuation

As of the end of FY 2024/25, NEA's total assets are valued at approximately Rs 644 billion. Fixed assets stand at Rs 235 billion, while Rs 99.46 billion is expected to be added from asset revaluation—yet to be formally accounted. Projects worth Rs 220 billion are currently under construction. “These will be capitalized upon completion,” said Shakya, emphasizing the urgency of timely project execution to secure returns.

The government’s equity investment in NEA is Rs 206.74 billion. Including retained earnings of Rs 46.47 billion and other reserves worth Rs 5.89 billion, NEA’s total equity stands at Rs 259.10 billion.

84.62% of households now have electricity access

In addition to its financial disclosures, the NEA white paper highlights progress in electricity access across the country. According to the 2021 national census, 84.62% of Nepali households now have access to electricity.

Managing Director Shakya shared that access has reached 97.5% of municipalities and 95% of wards nationwide. The NEA currently serves 5.56 million customers. Nepal’s total installed electricity capacity stands at 3,511 megawatts, of which 661.57 megawatts are owned and operated by the NEA.