Nepal depends heavily on hydropower for its electricity needs, with nearly all of its power generated from rivers. The country earns around $200 million each year by selling this electricity to neighboring India and Bangladesh. However, recent severe floods have exposed the risks of this heavy reliance on hydropower. More than 1,300 people were killed, and thousands are still missing after the floods, which struck areas near the border with Tibet. The floods caused serious damage to 12 hydropower plants in the Trishuli River basin, shutting down over 10% of Nepal's total power generation. The state-owned Nepal Electricity Authority, which owns six of the damaged plants, claims that electricity supply remains stable for households, but its spokesperson, Rajan Dhakal, admits that the country may need to rethink its hydropower strategy due to growing climate risks.
In 2010, only about two-thirds of Nepal’s population had access to electricity, and those who did often faced power cuts lasting up to 16 hours a day. By 2018, the expansion of hydropower projects, anti-corruption efforts, and increased energy imports from India helped most households achieve 24 hours of electricity daily. Today, Nepal has 225 hydropower plants with over 3,900 megawatts of installed capacity, enough to power three million homes. Hundreds more are under construction or in the planning phase, many in the high-altitude regions of the Himalayas. These projects typically don’t use water storage systems, but they face greater environmental risks because high-altitude areas are warming nearly 50% faster than the global average.
Preliminary studies suggest that the recent floods were caused by a collapsed glacier and its underlying bedrock. While scientists have not definitively linked the event to climate change, Nepal’s Disaster Risk Reduction and Management Authority reported that over nine out of ten major disasters between 2018 and 2024 were climate-related. Nepal’s former Energy Minister, Kulman Ghising, called the floods a “once-in-a-century” event and emphasized the need for more resilient infrastructure and early warning systems. It is believed that hundreds of hydropower workers, engineers, and residents may be trapped in mud-filled tunnels of the affected plants.
Rajan Dhakal of the Nepal Electricity Authority suggests that a "rethink" of the country's hydropower strategy could involve building reservoir-based plants that can store and release water. However, such projects would be costly and have environmental consequences. Renewable energy expert Kushal Gurung argues that Nepal should diversify its energy sources by investing more in solar and wind power, and adjusting its current pro-hydropower policy. Similarly, Vivek Shastry from Columbia University’s Center on Global Energy Policy says that adding wind and solar generation can help make the electricity system more resilient against future failures.
A report by the German aid agency suggests that Nepal’s solar power potential is about 10 times greater than its hydropower potential. However, Puspa Sharma from the National University of Singapore’s Institute of South Asian Studies points out that while there is untapped potential in wind and solar, hydropower gives Nepal a strong competitive advantage over its South Asian neighbors. Despite the known risks of disasters, hydropower continues to dominate large-scale investments in the country.
The Upper Trishuli-1 project, one of Nepal’s largest foreign direct investment projects worth around $647 million, was severely damaged in the floods. It was backed by the Asian Development Bank and the International Finance Corporation. The Upper Trishuli 3A, also heavily impacted, was funded by China’s Export-Import Bank. Critics argue that international lenders were aware of the risks but did not enforce sufficient preventive measures or checks and balances.
The Trishuli River basin has a history of flooding, with significant damage reported in 2024 and 2025. Rajan Dhakal admits that even with proper climate risk assessments, the design of hydropower plants may not have been sufficient. Private hydropower operators are also feeling the financial impact, with insurers paying out about $40 million for flood damage to over 20 privately owned plants in the past three years. Rising insurance costs are making the business of running hydropower plants "unfeasible," according to Uttam Bhlon Lama from the Independent Power Producers’ Association of Nepal.
Manjeet Dhakal, a member of Nepal’s climate delegation at the UN Climate Change Conference, argues that climate risks are global and cannot be managed by Nepal alone. He urges governments and international organizations to share data, assess impacts, and develop early warning systems together. He emphasizes that Nepal is among the least responsible for greenhouse gas emissions causing these risks and should not be solely burdened with responding to them.
Nepal's Hydropower Infrastructure Faces Climate-Related Challenges After Major Floods
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