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While the government is struggling with revenue collection, it is also not able to get foreign assistance as expected. The commitments of foreign loans and grants to the government have declined by 24.09 percent in the first 11 months of the current fiscal year. With only two weeks left to end the fiscal year, the government has been able to receive foreign assistance commitments of Rs 170.51bn in this fiscal year. Bilateral and multilateral donors had given aid commitments of Rs 224.64bn during the first 11 months of the last fiscal year. The government in the current fiscal year budget has initially targeted to receive Rs 297.71bn in foreign grants and loans for this fiscal. However, it reduced the target to Rs 209bn during the mid-term review of the budget. According to the Finance Ministry, it has entered into an agreement with foreign donor agencies to take loans and grants for different 22 projects and programs till mid-June. Of the total assistance, Rs 129.84bn is the loan while Rs 40.67bn is grant. The statistics of the Finance Ministry show commitment to both loans and grants has declined in this fiscal. However, grant commitments have declined by 55 percent in this fiscal compared to the last fiscal. Of the total aid commitment received in this fiscal, the largest commitment is from the World Bank (43 percent), followed by ADB (25.3 percent, the United Kingdom (13 percent), and Japan (10 percent). The government has prioritized receiving foreign aid in the form of budget support which Nepal can utilize in its priority areas. The government’s International Development Cooperation Policy (DPC)-2019 has highlighted that budget support is the country’s most preferred official development assistance modality. According to the ministry, development policy credit (DPC) worth Rs 12bn has been received from the World Bank for Green, Resilient, and Inclusive Development (GRID). In August last year, the two sides signed a  concessional financing agreement of $100m (equivalent to Rs. 12.7bn) for the GRID. The proposed budgetary support aims to support improvements in the enabling environment in Nepal toward green, climate-resilient, and inclusive development. This is the first in a programmatic series of three concessional loans on GRID, according to the World Bank. Likewise, the ministry said that the government also received Rs 3bn from the Asian Development Bank under its policy-based lending heading which is also budgetary support. The government and the World Bank in the last week of May signed a financing agreement for a $120m concessional loan from the International Development Association and a grant agreement for $19.7m from the Global Partnership for Education for the School Sector Transformation Program (SSTP) Operation, which support the implementation of the government's flagship School Education Sector Plan. The government also signed a $140m agreement with the World Bank for the Digital Nepal Acceleration (DNA) Project. The other multilateral lender, Asian Development Bank (ADB) in the last week of June approved a $50m loan to support the implementation of policy reforms by the government of Nepal to help improve its domestic and international trade. The ADB on May 17 approved a $300m loan to improve transport connectivity of the Kakarbhitta–Laukahi road in Nepal to international trade routes, particularly to India and Bangladesh. Amid declining revenue collection, the government has sought $200m from the Asian Development Bank in budgetary support to finance the resource gap. With the government struggling to maintain a balance on fiscal management, Finance Minister Prakash Saran Mahat on May 11 requested development partners for loans and substantial grants to Nepal. Mahat had made such a request during a discussion with the international development partners, saying that as Nepal has been affected by global climate change despite the country's negligible carbon emission, the aid should also be mobilized in the form of grants.  

The Nepal Electricity Authority (NEA) is facing challenges in ensuring a steady supply of electricity due to delays in the construction of two transmission lines. As a result, both industrial and household consumers are experiencing power cuts, despite the NEA having surplus electricity during the rainy season. NEA officials have stated that the intermittent power cuts are a direct result of the delay in constructing the transmission lines. The construction of the Hetauda-Dhalkebar-Inaruwa 400 kV and Hetauda-Bharatpur-Bardaghat 220 kV transmission lines has been ongoing for more than a decade, far beyond the originally planned completion time of three years. “The NEA’s system is under pressure due to the delay in these two transmission lines,” said Dirghayu Shrestha, the chief of the Transmission Directorate at NEA. “These projects have faced obstacles from the local community and have also been subjected to court-issued stay orders. Completing these transmission lines would have significantly increased our distribution capacity.” Due to the delay in constructing high-capacity transmission lines, the NEA is currently transmitting only around 80 MW using its old transmission system. The new lines would have supported the transmission of up to 300 MW. The construction of a 400 kV transmission line is essential for transmitting electricity to western Nepal from the Dhalkebar substation. The existing 132 kV transmission line in Hetauda is unable to carry sufficient electricity to supply the western region. As a result, NEA is unable to meet the demand and purchase electricity from independent power producers. Both transmission line projects were started with loan assistance from the World Bank. However, due to the construction delays, the World Bank withdrew from the projects in 2021. The World Bank had originally provided a $138 million concessional loan to fund the transmission lines, with the expectation that the projects would be completed within three years. While the contractor for the 400 kV transmission line was awarded the project in 2011, the contractor for the 220 kV transmission line was selected in 2009. Hetauda-Dhalkebar-Inaruwa 400 kV The NEA has prioritized the Hetauda-Dhalkebar-Inaruwa transmission line for strengthening its transmission network and facilitating power trade with India. “This trunkline is crucial for importing power from India and supplying it to industrial corridors in Birgunj and Biratnagar,” said Shyam Kumar Yadav, chief of the Hetauda-Dhalkebar-Inaruwa 400 kV project. Yadav added that the transmission line, to be built under the US government’s MCC project, will be connected to this trunk line. The project involves the installation of 792 towers. However, the project has faced challenges in constructing eight towers in Sarlahi and 25 towers in Makwanpur due to protests of the local people. “The locals are requesting a change in the transmission line’s route, but it is not feasible at this point,” added Yadav. The transmission line is being built by a joint venture between Angelique International from India and LTD from Germany. The project was initially estimated to be completed in 30 months, but it faced a four-year delay in obtaining forest clearance and an additional four years due to a court case. “If there are no further obstructions, we expect to charge the Inaruwa-Dhalkebar section of this transmission line within five months,” stated Yadav. “The completion of the Dhalkebar-Hetauda section is estimated to take one and a half years.” Hetauda-Bharatpur-Bardaghat 220 kV According to Santosh Sah, Chief of the Hetauda-Bharatpur-Bardaghat 220 kV transmission line project, one of the circuits of the double-circuit 220 kV transmission line will be operational within two weeks. “Currently, testing is underway on the Hetauda-Bharatpur section. Once this section is operational, NEA will be able to transmit 160 MW through this segment,” Sah stated. The Bharatpur-Bardaghat section is expected to be ready within three months. Out of the two remaining towers to be erected on this section, the first one is ready, and work is underway on the second tower. “Within 15 days of completing the tower construction, we will be able to install the wires,” Sah added. The project, originally estimated to be completed in 21 months, has experienced a delay of 14 years.

The Nepal Stock Exchange (NEPSE) plunged by 0. 06 points to close at 2,049.38 points on Thursday. Similarly, the sensitive index dropped by 0. 58 points to close at 382. 16 points. A total of 9,751,985-unit shares of 280 companies were traded for Rs 3. 07 billion. Meanwhile, City Hotel Limited and Rawa Energy Development Limited were the top gainers today with their price surging by 9. 99 percent. Likewise, Modi Energy Limited was the top loser as its price dropped by 10. 00 percent. At the end of the day, the total market capitalization stood at Rs 3. 00 trillion.  

The draft of the detailed project report (DPR) of the Raxaul-Kathmandu Cross-Border Railway Project has been handed over to Nepal. India handed over the draft DPR to the Ministry of Physical Infrastructure and Transport (MoPIT) this week. According to MoPIT officials, the southern neighbor will submit the final DPR to the Nepal government after incorporating suggestions from Nepal. The ministry’s spokesperson Bhimarjun Adhikari acknowledged that the draft DPR of the Raxaul-Kathmandu Railway Project has been received from India. “The draft DPR has been sent mainly seeking suggestions from Nepal,” said Adhikari, “We will submit it to the Railway Department who will study the report and make suggestions. Based on that, India will finalize the DPR and submit it to us.” India’s Konkan Railway Corporation Limited (KRCL) has been doing the DPR of the railway project which will connect Kathmandu with the Indian border town of Raxaul in the south. As per the memorandum of understanding (MoU) signed between Nepal and India on October 8, 2021, the detailed project report of the project should have been completed within 18 months, i.e., by mid-April, 2023. The Indian side has submitted the draft DPR two and half months later than the stipulated time. India has already given the report of the preliminary engineering and traffic survey of this railway to Nepal. According to the preliminary report prepared by KRCL, the length of the proposed Raxaul-Kathmandu railway will be 136 kilometers. As per the initial report of the Konkan Railway, a total of Rs 320bn will be required to build the broad-gauge Kathmandu-Raxaul Railway. Once completed, the broad-gauge line will give the Nepali capital a direct connection with the Indian railway network, enabling non-stop train travel to all Indian cities. The initial report of the project has shown that there will be 32 tunnels, with the longest would be eight kilometers long. The 136-kilometer-long railway project would have 40 kilometers of tunnelway and 35 small and large bridges. The preliminary study has shown that there will be 13 stations on the railway line. After receiving the DPR, the discussion about the modality of construction of the project will begin, according to the ministry officials. Nepal has been requesting India to build the project with a grant. Nepal and India had agreed to construct a cross-border electrified railway connecting Raxaul and Kathmandu during the then Prime Minister KP Sharma Oli’s India visit in April 2018. The two countries, in August 2018, exchanged a memorandum of understanding to carry out a preliminary engineering-cum-traffic survey of the broad-gauge line. With the submission of the draft DPR by India, the basis for the construction of this project has now been set. Once construction is completed, the railway line will provide Nepal with direct access to the huge Indian market. The electric railway line will also help replace fuel-based transportation, saving huge amounts of money being spent on the import of fuel, according to ministry officials. After the construction of the railway, goods can be transported directly to Kathmandu from India and third countries.