Policy |
Powering progress through policy
The impact of policy shifts and regulatory action is being felt across the hydropower sector – from Nepal and India to Australia and the US – as governments grapple with investment risk, project delays, and the urgent need for coherent frameworks to deliver reliable, renewable power
NEPAL IS ONE OF the world’s most hydropower blessed countries and has identified more than 83,000MW of resources, with some 42,000MW considered to be technically and commercially viable. Described as offering immense possibilities, hydropower can play a crucial role in the country’s drive towards energy diversification. However, for decades Nepal has been politically
Above: Chilime hydropower project in Nepal
Above: Micro hydropower in the hills of Nepal
and technically challenged in its ability to initiate, develop and commission large hydropower projects as planned. Due to systemic bottlenecks delaying project implementation, its vast hydropower potential remains underutilised, undermining energy security and economic growth. Key findings from recent studies reveal that factors contributing to such prolonged timelines and cost overruns include: Political instability. Bureaucratic inefficiencies. Land acquisition disputes. Protracted environmental and social impact assessments. Technical and geographical challenges. Financial constraints. Contractor performance issues
As Sharma Manan and Rawat Sharma Samjhana go on to explain in the International Journal of Engineering Research and Technology, political volatility disrupts policy continuity, while overlapping institutional mandates create decision-making bottlenecks. Land acquisition struggles stem from inadequate compensation and community resistance, and flawed EIA/SIA processes exacerbate delays. Projects in remote, geologically complex regions face logistical hurdles, and reliance on foreign financing introduces procedural delays, with natural disasters, governance failures, and socio environmental conflicts derailing progress. Ultimately, these delays perpetuate Nepal’s reliance on electricity imports, strain public finances, and erode community trust. Key examples of delayed projects include the 456MW Upper Tamakoshi hydropower scheme which was planned for completion in 2015, but challenges from an earthquake and the covid–19 pandemic meant it wasn’t commissioned until 2021. While the 1200MW Budhi Gandaki hydropower project was prepared more than a decade ago but couldn’t take-off due to controversies around land acquisition and financing. And then there’s the West Seti project which has been in existence for more than two decades but has suffered from investor pullout and delays, despite renewed attention regarding regional collaboration. To tackle such systemic challenges the authors say
there is a need to enhance institutional capability and inter-agency collaboration of Nepalese organisations engaged in planning and implementing hydropower projects. A proposed inter-ministerial task force or single-window project facilitation unit could help eliminate unnecessary crossovers and duplication, facilitating policy consistency. It would also be advantageous for project performance if monitoring functions were decentralised. Regional offices and remote consultants could make more prompt decisions to help fast track dispute resolution. In addition transparency and accountability in the management and acquisition of environments and land are vital. The authors also suggest Nepal looks for sources other than bilateral loans with political conditions for funding. Investments in developing local technical capacities – through university education and training of engineers and a technical workforce, as well as through knowledge transfer – would also decrease reliance on foreign companies and enhance the sustainability of the projects.
36 | November 2025 |
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