Public enterprises are financed mainly by

A public enterprise is a business owned and controlled by the government, set up to provide essential goods or services rather than to maximise profit for private shareholders. Because there are no private shareholders contributing share capital, the government itself supplies the bulk of the money the enterprise needs to start up and to keep running.

This funding usually comes in the form of grants, subventions, and subsidies voted for the enterprise in the national or state budget. The government may top this up with loans, but the day-to-day and capital funding of most public enterprises depends mainly on these government grants, which is why they are financed mainly by government grants.

Commercial banks and the World Bank can lend money to a public enterprise, but a loan is a debt that must be repaid with interest, so it is not the main or most reliable source of funding. There are also no shareholders in a public enterprise, since it is not owned through shares, so financing by shareholders does not apply here.

Remember that the presence or absence of shareholders is the quickest way to separate a public enterprise from a public limited company: a public enterprise belongs to the state and leans on state funding, while a limited company raises capital from shareholders.