A devastating flood in Nepal has severely impacted the country’s hydropower infrastructure, knocking out more than 12 percent of its total generating capacity and raising questions about the risks in relying heavily on this energy source. The deluge, which struck the Bhotekoshi and Trishuli valleys on Wednesday, damaged or destroyed 14 hydroelectric projects, including six still under construction, according to the Nepal Electricity Authority. In total, 431 megawatts of operating capacity were lost, and when factoring in halted construction sites, the affected capacity is estimated to be roughly twice that amount.
Among the construction projects affected was the Trishuli-1 plant, where 63 Indian workers were rescued from a construction tunnel, while over 100 others remain missing. The flooding is part of a broader catastrophe with a reported death toll exceeding 600, more than 2,400 people still unaccounted for, and approximately 93,000 requiring humanitarian aid.
Nepal’s economy has heavily relied on hydropower, viewing it as a key to future development and export earnings. The country’s rivers, fed by Himalayan glaciers and snow, hold vast hydropower potential—estimated at about 83 gigawatts—with 43 gigawatts considered developable. However, only a fraction of that potential has been harnessed due to financial, technical, and geographic challenges. Despite this, installed capacity grew from approximately 3,000 megawatts in 2024 to over 4,000 megawatts currently. The government aims to increase capacity to 28,500 megawatts by 2035, largely to meet export goals.
Nepal’s hydropower exports depend heavily on India, which is both the primary market and the transit route for electricity destined for other countries like Bangladesh. However, investment and cross-border electricity trade face geopolitical complexities. India has expressed caution toward Chinese-backed hydropower projects in Nepal amid territorial disputes and ongoing rivalry between the two countries. Following the 2020 border clashes with China, India tightened regulations on investments from neighboring countries, including China, though recent signs indicate potential easing of some restrictions. Indian-backed projects, such as the Arun-3 plant under construction in eastern Nepal, signal India’s growing role as an investor in Nepal’s sector.
Bangladesh, which seeks to diversify its energy sources amid vulnerabilities related to imported gas, has shown interest in Nepali hydropower. Yet, geographic constraints mean electricity flows between Nepal and Bangladesh must transit through India, complicating direct trade and exposing Bangladesh to disruptions linked to India-Nepal relations.
Experts highlight two major vulnerabilities for Nepal’s hydropower ambitions: its exposure to natural hazards inherent in its mountainous terrain and its dependence on India as a market and transit corridor. Climate change is expected to exacerbate risks such as landslides, avalanches, and glacial lake outbursts, posing ongoing challenges for the resilience and design of hydropower infrastructure.
The recent floods have intensified discussions around hydropower strategies, including whether to prioritize the construction of reservoirs that can store water and ensure steady electricity generation year-round, rather than relying heavily on seasonal river flows. They also underscore a difficult balancing act between meeting domestic energy needs and fulfilling export commitments critical for national development.
Looking further ahead, climate change introduces significant uncertainty. Some scientists warn that if global warming continues unabated, glacial melt could reduce water availability in the Himalayan river systems that underpin Nepal’s hydropower potential. This scenario could fundamentally alter the region’s energy prospects, requiring Nepal and its neighbors to reevaluate their long-term energy strategies.