KATHMANDU, April 7: The Balen Shah-led government has drawn criticism for its recent decision to accept foreign loans totaling US $185 million (approximately Rs 27.5 billion) from two major multilateral lending institutions.
A cabinet meeting held on Sunday approved the proposal to secure loans from key donor agencies under the Digital Nepal Transformation Project. Under this initiative, the government will receive $50 million from the World Bank (WB) and $40 million from the Asian Development Bank (ADB)—a total of $90 million—aimed at improving Nepal’s digital infrastructure and making government services more technology-friendly. Additionally, the cabinet approved $95 million in concessional loans from the World Bank for the Sustainable and Inclusive Development Project.
The government has faced backlash from various quarters, particularly as Nepal’s public debt continues to rise amid growing dependence on domestic and foreign borrowing—even to meet its smallest financial obligations. According to the Public Debt Management Office (PDMO), Nepal’s total public debt reached Rs 2.878 trillion by mid-March, equivalent to 47.13 percent of the country’s gross domestic product (GDP).
Public debt hits Rs 2.8 trillion mark
Speaking at a session of the House of Representatives on Monday, Rastriya Prajatantra Party lawmaker Khusbu Oli criticized the government for the lack of transparency in its debt management. Oli demanded that any large loan approvals be discussed in parliament.
“Although these are concessional loans, on what basis has the government accepted them when the relevant parliamentary committees and subcommittees have not yet been formed?” Oli questioned.
Former Finance Minister and lawmaker from the Nepali Communist Party, Barshaman Pun, also sought clarification on the acceptance of around Rs 28 billion in loans. “The current government previously blamed past administrations for pushing the country into persistent debt. How can it now break its own promise of not taking on loans for state affairs?” Pun asked reporters following a party meeting on Monday.
The government has long stated its commitment to strengthening digital systems and data governance to deliver direct benefits to grassroots communities. However, an IT expert affiliated with a government team expressed doubt about whether the funds from the ADB and WB will be used effectively.
“Despite the popularity of such announcements, the government lacks proper preparation. It remains unclear how and where to begin in fulfilling this task,” the expert said, raising concerns about the proper utilization of the approved loan amounts.
