Kathmandu, Nepal: Nepal is once again trying to unlock its vast hydropower potential by making it easier for private and foreign investors to enter the sector. The government says it is simplifying rules and opening up new areas of participation—but many in the industry are watching closely to see if these promises will translate into real change.
Energy Minister Biraj Bhakta Shrestha announced that private companies will now be allowed to take part not just in electricity generation, but also in transmission, distribution, and power trading. This marks a significant shift in a sector that has long been tightly controlled by the state.
Speaking at a gathering of hydropower developers in Kathmandu on Friday, the minister admitted that outdated laws and bureaucratic delays have discouraged investment for years. He said the government has already started revising such laws to make the process smoother and more predictable.
The government is also preparing to introduce new bills on renewable energy and energy efficiency in Parliament. These steps are tied to Nepal’s ambitious goals: producing 28,500 megawatts of electricity by 2035 and exporting up to 10,000 megawatts, mainly to India.
On paper, the vision is bold. In reality, however, Nepal’s track record has been mixed.
While electricity generation has grown steadily—largely driven by the private sector—progress in building transmission lines and export infrastructure has been slow. This has sometimes left the country with surplus power during certain seasons but limited ability to distribute or sell it.
The government has set aside around NPR 70 billion this year to expand transmission lines and substations, a critical piece of the puzzle. Still, past delays linked to land acquisition, project management, and coordination between agencies raise concerns about whether these plans will be delivered on time.
For investors, the challenges go beyond infrastructure. Issues such as unclear policies, delays in power purchase agreements, and concerns over profit repatriation continue to affect confidence.
At the same event, hydropower developers urged the government to go further—not just by announcing reforms, but by ensuring they are implemented consistently. The private sector already generates the bulk of Nepal’s electricity, contributing over 3,400 megawatts out of the country’s total 4,300 megawatts.
Nepal’s rivers offer enormous potential, and its location next to energy-hungry markets like India gives it a natural advantage. But turning that potential into reality will depend less on policy announcements and more on execution.
For now, the message from the government is clear: Nepal is open for hydropower investment. The bigger question is whether the system on the ground is ready to support it.
