How Much Hydroelectricity Can Be Produced In Nepal?

How much hydroelectricity can be produced in Nepal?

Nepal is a landlocked country located in South Asia between India and China. With a population of approximately 29 million people, Nepal is a diverse country with over 120 ethnic groups and 123 languages spoken. Geographically, Nepal is dominated by the Himalayas and contains 8 of the 10 highest mountains in the world, including Mount Everest. Nepal has an area of 147,181 sq km and elevations ranging from 60 meters above sea level to over 8,848 meters at the peak of Mount Everest.

Despite its mountainous terrain, Nepal has abundant water resources with over 6,000 rivers and rivulets flowing through the country. This presents significant potential for hydroelectricity generation. Hydropower currently accounts for over 90% of Nepal’s electricity production. However, only about 2% of Nepal’s technically viable hydroelectric potential has been utilized so far. As Nepal continues to develop, increased electricity production will be crucial for powering homes, businesses, and industries across the country.

Nepal’s Current Energy Situation

Nepal’s current electricity production depends heavily on hydropower which represents over 90% of the country’s generation capacity according to the International Energy Agency (IEA Nepal). In 2020, Nepal produced around 4 billion kWh of electricity, meeting around 85% of the country’s annual consumption needs according to Worldometers (Worldometers). The remaining electricity needs are imported from India. Nepal’s per capita electricity consumption was low at around 145 kWh in 2016, compared to over 1300 kWh in India and over 4000 kWh in China in the same year according to Worlddata (Worlddata). This indicates significant potential for growth in electricity demand as the country develops.

Nepal’s Hydroelectricity Resources

Nepal has abundant hydroelectric resources due to its geography. The country has around 6,000 rivers flowing south from the Himalayas that all feed into the Ganges in India. These rivers have tremendous potential for hydroelectric power generation due to Nepal’s steep elevation drop from over 8,000 meters in the Himalayas to just 100 meters above sea level in the Terai plains bordering India. The steepest river gradients are found on rivers originating in the higher Himalayas, such as the Karnali and the Seti rivers which descend over 7,000 meters.

According to the Water and Energy Commission Secretariat (WECS), Nepal has around 83,000 MW of hydroelectric power potential if all feasible projects on Nepal’s river systems were developed. However, about 42,000 MW is considered economically viable given current development costs [1].

The most promising hydroelectric sites are located on the Karnali, Gandaki and Koshi river basins which together account for over 80% of Nepal’s technically and economically feasible hydro potential. These rivers have high discharge rates, especially during the monsoon season, as they drain the southern Himalayan mountains. For example, peak monsoon discharges on the Karnali river can reach over 5,000 cubic meters per second [1].

Existing Hydroelectricity Projects

Nepal has made significant investments in hydropower plants over the past few decades. Some of the major existing hydroelectric projects in Nepal include:

The Kali Gandaki “A” Hydroelectric Plant was commissioned in 2002 and has an installed capacity of 144MW. It utilizes the waters of the Kali Gandaki River in western Nepal [1].

The Kulekhani Hydroelectric Project was completed in 1982 and has an installed capacity of 92MW. It is located on the Kulekhani River in central Nepal [2].

The Kaligandaki Hydroelectric Plant began operating in 1991. With an installed capacity of 72MW, it harnesses the Kaligandaki River in central Nepal [3].

The Marsyangdi Hydroelectric Plant was completed in 2008 and generates 69MW of electricity from the Marsyangdi River in central Nepal [4].

The Trishuli Hydropower Plant was commissioned in 1967 and produces 21MW from the Trishuli River in central Nepal [5].

Hydroelectricity Production Trends

Nepal has a long history of hydroelectric power development dating back over a century. The first hydropower plant was commissioned in Pharping in 1911 with a capacity of 500 kW. In the 1930s and 1940s, several small and medium sized projects were developed by the government. However, progress was slow for many decades. As of the 1990s, Nepal had developed only around 300 MW of hydroelectricity in total (Source).

Hydroelectricity generation saw more rapid growth in the 2000s and 2010s. As of 2021, Nepal had 1,447 MW of installed hydropower capacity, producing around 7,000 GWh annually (Source). Several major projects also began construction in the 2010s, so capacity is projected to grow substantially in the coming decade. The government has set a target to reach 15,000 MW of hydroelectric capacity by 2030 (Source).

Barriers to Further Hydro Development

Nepal faces several key barriers that have constrained further development of its vast hydroelectric potential. The mountainous terrain and remote location of many viable hydropower sites pose significant logistical and cost challenges ( Constructing dams, tunnels, roads, and transmission infrastructure in steep Himalayan valleys and rivers is extremely difficult and expensive. Sedimentation from erosion and landslides is also a major problem shortening the lifespan of reservoirs (

Financing large-scale hydro projects is another key constraint, as Nepal’s hydropower construction costs per megawatt are among the highest in the world. Most projects rely heavily on foreign investment and loans, but unfavorable lending terms and corruption scandals have hampered development ( Environmental regulations and local resistance have also stalled some large dam projects like Arun III over concerns of displacement and downstream impacts.

Government Policy and Targets

The Government of Nepal has set ambitious goals for developing the country’s vast hydroelectric potential. According to the Nepal Hydropower Development Program, the government aims to harness 10,000 MW of hydroelectric capacity by 2030.

In 2016, the government released its National Energy Crisis Mitigation and Electricity Development Decade Master Plan, which outlined a goal of producing 15,000 MW of electricity by 2030, with 10,000 MW coming from hydroelectric sources. This plan aligns with Nepal’s push for cleaner energy production.[1]

According to the master plan, Nepal has the potential to produce over 40,000 MW from hydroelectric sources. However, developing even a fraction of that potential will require massive investments in dams, tunnels, and transmission infrastructure.

To attract private investment, the government has introduced policies like tax breaks, low interest loans, and free equity shares for projects that begin operating by 2024.[2] Meeting the country’s hydro goals will depend on the success of these incentives.

Private Sector Involvement

The private sector, especially independent power producers (IPPs), are playing an increasingly important role in hydropower development in Nepal. This is evident from the fact that the Asian Development Bank recently provided $60 million in financing to an Indian company, GMR Upper Karnali Hydropower, to build a 900MW hydropower plant.

IPPs are responsible for identifying potential project sites, conducting feasibility studies, securing financing, obtaining necessary permits and licenses, constructing power plants, and operating facilities. They bear the upfront development costs and risks, but also stand to profit from electricity sales once projects are operational. This privatization and opening up to foreign investors has helped attract much-needed capital and expertise into Nepal’s hydropower sector.

However, some experts argue there should be greater transparency and competition in awarding projects to IPPs to ensure the best outcomes for Nepal. There are also concerns around social and environmental impacts. Overall though, IPPs seem poised to accelerate hydropower development compared to relying solely on cash-strapped state utilities.

Environmental Considerations

Nepal’s rush to develop its hydropower potential has raised concerns over the environmental impacts of dams. Hydroelectric projects can negatively affect forest cover, aquatic biodiversity, and wildlife habitats. Large reservoirs created by dams flood forests and agricultural lands. They also disrupt river connectivity, preventing nutrient transport and fish migration.

According to a 2021 study published in Sustainable Production and Consumption, hydropower dams in Nepal have led to deforestation, soil erosion, and landslides in surrounding areas ( Another analysis by The Third Pole states that dams have already impacted aquatic biodiversity in the country. Fish species like the Golden Mahseer have seen declining populations due to barriers to upstream migration (

As Nepal pursues its hydroelectric goals, ecological impacts must be considered. Proper environmental impact assessments, fish passes, and sediment management will be crucial to minimizing biodiversity loss and habitat destruction.


Nepal has significant potential for hydroelectric power generation from its fast-flowing rivers and steep terrain. With over 6,000 rivers and tributaries, Nepal has an estimated hydro potential of 83,000 megawatts, however only around 1% of this has been developed so far.

While there are challenges around financing, policy, and environmental considerations, the Nepalese government has set ambitious targets for increasing hydropower capacity to 15,000 megawatts by 2030. This will require attracting private investment, updating grid infrastructure, implementing strategic projects, and adopting sustainable development practices.

If these targets can be met, hydroelectricity production is poised to increase substantially in the coming years. This will not only boost Nepal’s economic development, but also improve electrification rates and energy security for its population. With supportive policies and prudent project implementation, Nepal can harness more of its hydro resources and realize its full potential as a major hydroelectricity producer in South Asia.

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