KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top economic news highlights.

Former CEO of Karnali Development Bank Arrested for Embezzling Over NPR 2.5 billion: Rajendra Bir Raya, the founding chairman and former CEO of Karnali Development Bank, has been arrested. The 65-year-old resident of Salyan was apprehended by the Central Investigation Bureau (CIB) of Nepal Police on Saturday from Belahiya in Rupandehi. He is accused of embezzling over NPR 2.5 billion while serving as chairman and CEO of the bank and fleeing. The case is being investigated in coordination with the Nepal Rastra Bank under the Banking Offense and Punishment Act, 2064.

Budget Provision to Purchase Electricity From Run-of-River Projects on ‘Take and Pay’ Basis Alarms Private Sector: The budget for the upcoming fiscal year 2082/83 has introduced a provision to sign Power Purchase Agreements (PPA) with run-of-the-river hydropower projects on a “Take and Pay” basis, making things difficult for private power producers. Energy entrepreneurs say this provision blocks the way for constructing projects with a combined capacity of around 17,000 megawatts. Ganesh Karki, president of the Independent Power Producers’ Association of Nepal (IPPAN), said that despite financial institutions being clear that they would not finance PPAs on a “Take and Pay” basis, the budget has introduced such a provision in a way that could destroy the energy sector.

Auditor General Flags Nearly NPR 4 billion Tax Evasion in Electric Vehicle Imports: The Office of the Auditor General has raised serious concerns over a tax evasion of nearly NPR 3.75 billion during the import of electric vehicles in the fiscal year 080/81. According to the audit, importers artificially reduced engine capacities, resulting in lower tax rates and significant revenue loss. The audit found that this manipulation led to a tax exemption exceeding NPR 3.77 billion in a single year. The Auditor General has directed the concerned authorities to investigate the matter thoroughly and recover the lost revenue. Electric vehicle taxes are determined based on motor capacity, and declaring lower capacities results in reduced tax liabilities, which has been exploited in this case.

Government to Establish AMC to Manage Rising Bad Loans: To tackle rapidly growing non-performing loans (NPLs), the government plans to establish an Asset Management Company (AMC). In the budget presented on Thursday, Finance Minister Bishnu Poudel announced that the second financial sector reform strategy will be implemented along with the establishment of the AMC to manage bad loans in banks and financial institutions.

Public Enterprises Losing Profit Despite Increased Government Investment: Despite the government increasing investment in public enterprises annually, profits have been decreasing. According to the Ministry of Finance’s “Annual Review of Public Enterprises 2082,” billions of rupees invested without proper planning are being wasted. The government’s total investment in public enterprises has reached NPR 703.93 billion—a 5.86% increase from FY 2079/80 (2022/23). However, dividends have declined.

Government Announces Kathmandu-Terai/Madhesh Expressway Completion by Fiscal Year 2026/27: The government has announced the completion of the Kathmandu-Terai/Madhesh Expressway (Fast Track) by fiscal year 2083/84 BS (2026/27). Finance Minister Bishnu Poudel made the declaration on Thursday during his budget speech. “In the upcoming fiscal year 2082/83, construction will be completed on 37 kilometers of road, 4 kilometers of tunnel, and 60 bridges,” he stated. A budget of NPR 24.49 billion has been allocated for the project for the coming year, up from NPR 22.54 billion in the current fiscal year.

FNCCI Welcomes New Budget, Calls for Full Implementation: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has welcomed the government’s budget for the upcoming fiscal year and called for its full implementation. On Jestha 15 (May 29), Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel presented a budget of NPR 1.964 trillion for FY 2082/83 (2025/26). “We believe the budget has taken encouraging steps for the overall national economy,” the federation said.

Government to Buy Electricity from ROR Hydropower Projects Only When Needed: The government has introduced a new policy to purchase electricity from run-of-river (ROR) hydropower projects only during times of need. In the FY 2082/83 (2025/26) budget, the government announced it will enter into Power Purchase Agreements (PPAs) based on a “take-and-pay” model to maintain a balance between production and consumption. However, the government continues to license such projects under the BOOT (Build, Own, Operate, Transfer) model.

Government Aims to Collect NPR 66.58 billion in Dividends Next Year: The government aims to collect NPR 66.58 billion in dividends from its investments in various institutions in FY 2082/83 (2025/26). It expects the highest returns from financial institutions. In FY 2081/82, the target was NPR 58.41 billion, and NPR 46.61 billion was collected in FY 2080/81. This includes income from public institutions and regulatory bodies like Nepal Rastra Bank.

India reduces import duty on crude edible oil from 20% to 10%, likely to hit Nepal’s exports: India has reduced the import duty on crude edible oil from 20 percent to 10 percent, effective from Friday. This new provision is expected to hit the edible oil trade, which has lately been contributing significantly to Nepal’s export trade. As India provides duty exemption to encourage its own industries, its internal production is likely to be promoted and dependency on countries like Nepal could decrease, thus affecting Nepal’s export market.

Nepal Electricity Authority Plans to Launch ‘Pumped Storage’ Hydropower Projects: The Nepal Electricity Authority (NEA) has announced its intention to begin constructing ‘pumped storage’ hydropower projects to enhance energy security. In a discussion with journalists, NEA Executive Director Hitendra Dev Shakya said that projects at locations like Kulekhani and Sisneri are planned to begin next fiscal year. The technology will store unused water in reservoirs and use electric pumps to transport it to upper reservoirs for generating electricity later.

40 MW Rahughat Hydropower Project Nears Completion with 81% Physical Progress: The construction of the 40-megawatt Rahughat Hydropower Project in Myagdi district is in its final stages. The project is being developed by Raghuganga Hydropower Limited, a subsidiary of Nepal Electricity Authority (NEA). NEA has reported that the project has achieved 81% physical progress so far. The site was recently inspected by the Executive Director of NEA, the Secretary of the Ministry of Energy, Water Resources and Irrigation, the Indian Ambassador to Nepal, and other senior officials.  The Rahughat project is an important initiative funded with technical and financial support from the Government of India.

Nepal’s Largest Organic Fertilizer Factory Inaugurated in Rupandehi: Nepal’s largest organic fertilizer factory has officially been inaugurated in Rohini, Rupandehi. The factory, operated under Grow More Fertilizer and Chemical Pvt. Ltd. by industrialist couple Siddhartha and Poonam Kumari Agrawal, started production last year in Kotahawa of Rohini Rural Municipality-4 with an investment of NPR 300 million. With a daily production capacity of 200 metric tons, the factory currently produces 80 metric tons of fertilizer daily under the brand name “Ratnam.” The inauguration was carried out by Lumbini Province Chief Minister Chet Narayan Acharya.

Government to Provide Free Six-Month Training to 26,900 Youths: The government will offer free six-month vocational training to 26,900 youths in FY 2082/83 BS (2025/26) through the National Vocational Training Institute under the Ministry of Labor, Employment, and Social Security. The budget includes funding for this training program, which targets youth unable to pursue higher education and aims to promote entrepreneurship across all seven provinces.

Bagmati Province Ministry Suspends Public Visits for Budget Preparation: The Ministry of Economic Affairs and Planning of Bagmati Province has suspended public visits to focus on preparing the budget for FY 2082/83 (2025/26). A notice posted at the ministry’s gate on Saturday stated that all public meetings are suspended until further notice due to ongoing budget preparations.

NIFRA to Issue Green Bonds from Today: Nepal Infrastructure Bank (NIFRA) will begin issuing green bonds starting Sunday. The seven-year bonds will offer a 6% annual interest rate. NIFRA has received approval from the Securities Board of Nepal (SEBON) to issue 5 million units worth NPR 5 billion at a face value of NPR 1,000 each. The public will be offered bonds worth NPR 2 billion, including allocations for mutual funds.

Non-Life Insurance Companies Generate NPR 36 billion in Business: Non-life insurance companies have generated nearly NPR 36 billion in business in the current fiscal year up to Baisakh (April/May). According to the Insurance Regulatory Authority, 14 companies earned NPR 35.09 billion, while four micro-insurance firms earned NPR 769 million.

Most programs cut in Karnali Province’s 2082/83 budget; locals criticize neglect: Most programs in Karnali Province have been cut in the budget for the fiscal year 2082/83 (2025/26). Only a few old programs have received additional budget. Citizen activist Rajendra Bikram Shah stated that the names of three districts in Karnali affected by the earthquake were not even mentioned. He said that even in the budget sent under old plans, the amounts were published without actual figures. Former Minister for Economic Affairs and Planning Gopal Sharma stated that “Kathmandu is not far from Karnali, but Karnali is far from Kathmandu.”

Tunnel to be built on Nayapul–Hemja section of Mid-Hill Highway: To make the road network safer and shorter, the government has decided to build a tunnel in the Nayapul–Hemja section of the Mid-Hill Highway. In the budget for the upcoming fiscal year 2082/83 (2025/26), made public on Thursday, the government has mentioned advancing the construction work of the Nayapul–Hemja tunnel. Under the plan to ensure funding and advance construction works for tunnels with completed feasibility studies, Nayapul–Hemja has also been prioritized. Along with this, the budget mentions moving forward with resource management and other preparations for tunnels with completed feasibility studies.

Among Nepal’s 22 large traditional mines, Rangkhani in Baglung awaits excavation: Rangkhani in Jaimini Rural Municipality-10, Baglung, is one of Nepal’s 22 large traditional mines. The Rangkhani area, which has dozens of tunnels where copper ore was extracted, is awaiting excavation. Some of the tunnels have been buried due to lack of conservation, while landslides have also caused damage. Many people lost their lives while extracting copper. Such incidents have not been seen in recent times. Bambahadur Shrees, 95, of Rangkhani, Jaimini-10, said that his forefathers extracted copper ore from the hill near his house.

Surge in Tourists Boosts Homestays in Narchyang Along Annapurna North Trekking Route: With the increasing number of trekkers on the Annapurna North Trail, tourist activity has also risen at homestays in Narchyang village.Although homestay promotion began eight years ago in Ward 4 of Annapurna Rural Municipality, Myagdi, the expected tourist influx hadn’t materialized. According to homestay operator Sita Tilija Pun, more tourists are now choosing to stay overnight with the rise in trekking traffic.

 Gold and Silver Prices Rise Slightly in Nepali Market: Both gold and silver prices increased slightly in the Nepali market on Sunday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of hallmark gold stood at NPR 188,800 per tola (11.66 grams) on Sunday. Similarly, the price of silver was fixed at NPR 1,985 per tola. Previously, on Friday, the price of hallmark gold was NPR 188,500 per tola, while silver was NPR 1,980 per tola.