The federal government had aimed to raise NPR 217 billion in external loans in the current fiscal year, but it has not even achieved half of that goal. According to the Public Debt Management Office’s report up to the end of Jestha (mid-June), only NPR 99.2 billion in external loans has been mobilized—just 45.72% of the annual target.
In contrast, the government is on track to fully meet its domestic borrowing target. Of the planned NPR 330 billion in internal loans, approximately NPR 315 billion (95.45%) has been raised over the past 11 months.
Most external loans are allocated for capital expenditure, particularly development projects. However, the sluggish pace of project execution and inability to utilize allocated funds have led to underperformance in external loan mobilization, explained Gopi Krishna Koirala, head of the Public Debt Management Office.
He noted that bilateral and multilateral external loans are typically disbursed based on progress in development projects. “Since our agencies are unable to deliver on time, disbursements are delayed,” said Koirala. Generally, expenditures are initially covered through internal sources and reimbursed later through external loans. But with minimal project execution, disbursement has been poor this year.
Donors mostly provide “project financing” rather than direct “budgetary support,” meaning funds are released only when physical progress is demonstrated. Thus, the performance of executing agencies—mainly line ministries—has a direct impact on loan disbursement.
As of Saturday evening, government capital expenditure stood at only around 42% of the annual target, according to the Financial Comptroller General Office.
Total Public Debt Reaches NPR 2.65 Trillion
The total outstanding public debt has now reached NPR 2.65 trillion, up from NPR 2.43 trillion at the beginning of the fiscal year—an increase of NPR 220.58 billion. This represents 43.47% of Nepal’s Gross Domestic Product (GDP).
Of the total debt, 52% is external debt (NPR 1.382 trillion), while 47.94% is domestic debt (NPR 1.273 trillion) as of the end of Jestha.
The government had planned to mobilize NPR 547 billion in total public debt this fiscal year. So far, NPR 414.19 billion has been raised, achieving 75.72% of the target.
In the first 11 months, the government spent NPR 329.6 billion on debt servicing (principal and interest). Out of the NPR 402.85 billion allocated for debt servicing this year:
- NPR 223.36 billion went to domestic debt principal repayment.
- NPR 54.37 billion to domestic interest payments.
- NPR 43.29 billion to external debt principal repayment.
- NPR 8.57 billion to external interest payments.







