Energy Sector Lending Banks Meeting NRB’s 6.5% Target?

Looking at NRB’s Key Financial Indicators (Asadh end 2082 / Mid-July 2025), the picture of energy sector financingby commercial banks is mixed. The central bank requires banks to allocate at least 6.5% of their total loans to the energy sector, particularly hydropower, renewables, and infrastructure-related financing.

The leaders in meeting and surpassing this target are NMB Bank (13.05%), Sanima Bank (13.14%), Kumari Bank (11.38%), and Laxmi Sunrise Bank (10.37%), all of which are well above the mandated level. These banks have strategically positioned themselves as strong lenders in hydropower and energy projects, aligning with Nepal’s long-term goals of energy self-sufficiency and export potential. Prabhu Bank (7.93%), Citizens Bank (12.24%), and ADBL (6.36%) also fulfill the requirement, showing commitment to priority sector lending.

However, some banks are still underperforming. For instance, Nepal Bank (7.12%) just barely clears the threshold, while RBB (8.77%) is above but not significantly strong in energy exposure. In sharp contrast, Standard Chartered (10.50%)does perform well, but several other big private banks such as Everest Bank (8.50%) and NIC Asia (2.61%) are struggling to align with NRB’s requirements. NIC Asia’s energy portfolio, in particular, is far below the 6.5% mark despite its size, showing a skewed focus towards retail and corporate loans instead of long-term infrastructure projects.

For policymakers, this data highlights which banks are supporting Nepal’s energy ambitions and which remain hesitant. For investors, higher energy sector lending implies stronger participation in long-term, often government-backed projects that can yield stable returns, though it may carry higher project execution risks.