KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic developments present a mixed picture of improving external-sector performance, expanding regional economic opportunities, and persistent structural and disaster-related risks. Electricity exports exceeding Rs 5.09 billion in one month demonstrate the growing importance of hydropower as an export earner, while the suspension of exports to Bangladesh following flood damage highlights the sector’s vulnerability to climate and infrastructure risks. The government’s plan for a scientific assessment of the Bhote Koshi disaster could therefore be significant for strengthening the resilience of future hydropower investments.
The Rs 94.59 billion current account surplus and Rs 90.34 billion balance-of-payments surplus indicate continued external-sector strength. However, relatively modest foreign direct investment points to the need for stronger investor confidence and a more predictable business environment. Finance Minister Swarnim Wagle’s outreach to Indian investors reflects an effort to attract capital into manufacturing, clean energy, agriculture, tourism and digital industries while integrating Nepal into regional supply chains.
Meanwhile, concerns within the financial sector remain. Rising non-performing loans and heavy reliance on collateral-based lending indicate constraints on productive credit and private-sector expansion. Calls for project-based financing and institutional reforms at NRB suggest a need to balance financial stability with greater access to investment capital. Overall, Nepal’s economic prospects remain closely tied to infrastructure resilience, investment reform, financial-sector modernization and effective regional economic integration.
Electricity exports exceed Rs 5.09 billion in one month
Nepal exported electricity worth more than Rs 5.092 billion to India and Bangladesh between August 17 and September 16, according to the Nepal Electricity Authority (NEA). During the period, more than 565.6 million units of electricity were exported through bilateral agreements and the electricity exchange market. Under bilateral agreements, more than 421.6 million units were sold for over Rs 3.64 billion, while exports of more than 143.9 million units through the exchange market generated Rs 1.449 billion. The NEA said electricity exports to Bangladesh have currently been suspended after the Bhote Koshi flood damaged structures at the Chilime and Trishuli hydropower stations.
Finance Minister Wagle urges Indian investors to explore opportunities in Nepal
During his three-day official visit to New Delhi, Finance Minister Swarnim Wagle addressed a business and investment interaction organized by the Confederation of Indian Industry (CII) and urged Indian investors and business leaders to explore new opportunities and expand their existing operations in Nepal. Wagle highlighted Nepal’s potential for greater bilateral cooperation in areas including digitalization, clean energy, high-value agriculture, wellness tourism and manufacturing. He said Nepal should be viewed not merely as a market but as a strategic partner for production, value addition and integration into regional supply chains. Indian business leaders participating in the interaction expressed interest in Nepal’s investment policies, incentives and sector-specific opportunities.
Current account surplus reaches Rs 94.59 billion
Nepal’s external sector recorded an improvement during the review period, with the current account registering a surplus of Rs 94.59 billion and the balance of payments (BOP) showing a surplus of Rs 90.34 billion. The current account surplus rose from Rs 78.29 billion during the corresponding period of the previous year. In US dollar terms, it increased to USD 620 million from USD 560 million. The BOP surplus also increased from Rs 89.3 billion a year earlier. However, in US dollar terms, the surplus stood at USD 590 million, compared with USD 640 million during the same period last year. Net capital transfers declined to Rs 630 million from Rs 1.04 billion, while foreign direct investment in equity increased to Rs 1.01 billion from Rs 690 million during the corresponding period of the previous year.
Former finance minister warns against measures affecting NRB autonomy
Former finance minister and former Nepal Rastra Bank (NRB) governor Yubaraj Khatiwada has warned that proposed government measures to shorten the governor’s tenure and amend statutory provisions could undermine the central bank’s institutional autonomy. Speaking at an economic seminar organized by Artha Ko Artha in Kathmandu, Khatiwada said weakening the independence of the central bank and turning it into a subordinate administrative institution could create long-term instability in monetary and financial policy. He said addressing the country’s broader economic challenges requires improving the government’s capacity to spend capital, restoring private sector confidence following the disruptions of 2025 and pursuing credible structural reforms rather than relying primarily on punitive measures to address systemic financial risks.
NRB executive director calls for shift to project-based lending
Nepal Rastra Bank Executive Director and Spokesperson Guru Prasad Paudel has called for a shift from collateral-based lending toward project-based financing to address challenges in Nepal’s financial sector. Speaking at an event in Kathmandu, Paudel said approximately 67 percent of total bank credit is currently issued against collateral, a practice that he said discourages innovative project-based financing. He noted that banks’ capital adequacy ratio remains healthy at around 9.7 percent, above the regulatory minimum of 8.5 percent. However, gross non-performing loans have risen to around 5.5 to 6 percent. Paudel said measures are being taken to address asset-quality concerns and manage approximately Rs 57 billion in non-banking assets. He added that the government is working to establish an asset management company by mid-January 2027.
Scientific study planned to assess Bhote Koshi flood risks to hydropower
The government plans to conduct a scientific study of the Bhote Koshi flood in Rasuwa to determine its causes, sequence and potential risks to hydropower infrastructure. The study will examine geological, glacial and hydrological factors, as well as other high-altitude risks and the possible impacts of climate change. The Ministry of Energy, Water Resources and Irrigation said the assessment will draw lessons from the damage caused to energy infrastructure and help improve long-term disaster preparedness. The study will also focus on strengthening the resilience of hydropower projects against floods, droughts, climate change and other natural hazards. It will cover the area from the source of the flood to the downstream region and assess how similar disasters could affect energy infrastructure along other river systems.
242 Dhanusha families receive land ownership certificates after nine years
A total of 242 families in Kshireswarnath Municipality-2, Dhanusha, have received land ownership certificates nearly nine years after a land survey was completed in the area. The families, who had been residing on the land as self-resident occupants, received the certificates from the Survey Office, Dhanusha, after the necessary legal and administrative procedures were completed. The land survey in the former Ramdaiya Bhawadi VDC wards 1, 5 and 9 was completed in fiscal year 2017/18, but distribution of the certificates was delayed due to pending administrative procedures. With formal ownership now established, the families will be able to access legal and financial benefits, including using their land as collateral to obtain loans from banks and financial institutions. Clear ownership is also expected to help resolve land-related disputes. Earlier, 4,354 families in Dhanusha had received land ownership certificates.
MIT Foundation to support flood-affected children with Rs 578.5 million
The MIT Foundation will provide Rs 578.5 million to support the education, health and nutrition of children who lost their parents in the Bhote Koshi flood. At a programme held on Friday, National Child Rights Council Secretary Durga Prasad Chalise and Foundation Chair Shesh Ghale signed a memorandum of understanding (MoU) on cooperation. Under the agreement, flood-affected children below the age of 18 will receive support in a safe family environment, including education, healthcare, nutrition and psychosocial assistance. The agreement prioritizes care by relatives, while institutional care will be considered only as a last resort. The support will continue from the date of signing until the targeted children reach the age of 18. The National Child Rights Council will facilitate beneficiary identification, coordination and child protection, while the foundation will provide financial and technical assistance.
11 more bodies recovered from Upper Trishuli-1 tunnel
A joint search and rescue team has recovered 11 more bodies from the Audit-3 tunnel of the Upper Trishuli-1 Hydropower Project in Rasuwa. According to a search and rescue update issued by the Nepal Army on Saturday afternoon, the bodies were found trapped in a steel mesh structure and buried under mud inside the tunnel. The joint team, comprising security personnel and project representatives, recovered all 11 bodies during the operation. The victims were among those reported missing following the devastating Bhote Koshi River floods on August 26. The Army said search operations inside the project area and surrounding locations are continuing to locate those who remain missing.
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