Nepal's Hydropower Gambit: A Crisis That Exposes the Fragility of Climate-Dependent Energy

Unraveling a Nation's Power Strategy

When I first reported on Nepal's ambitious hydropower ambitions, I thought the country had struck gold. With over 90% of its electricity generated from water, it was a model of sustainable development in an era where climate change looms large. Yet as the waters of the Trishuli River surged last week, I realized that beneath this success story lay a dangerous gamble with nature itself.

More than 10% of Nepal's energy generation capacity was wiped out by the deadly floods. Thirteen hydropower plants were either destroyed or rendered inoperable—leaving millions without reliable power and raising fundamental questions about the country's energy strategy. The disaster was not just a natural calamity, but an illustration of how climate change is unraveling even the most carefully laid plans.

From Power to Peril

Until 2010, Nepal struggled with frequent power outages. A few years later, though, things had changed dramatically. Hydropower projects became the backbone of the country's economic growth and energy independence. With the state-owned Nepal Electricity Authority (NEA) leading the charge, hydropower capacity expanded from a mere fraction of installed capacity to over 3,900MW—enough to power three million homes simultaneously.

And it was profitable too. Nepal exported nearly $200 million annually in hydroelectricity to India and Bangladesh, creating a powerful economic incentive to continue building. But the very glaciers and mountainous terrain that make this possible are now melting at an unprecedented rate—50% faster than the global average. What seemed like a renewable resource has become increasingly unpredictable and fragile.

Climate Change as a Factor in Infrastructure Collapse

While scientists have yet to establish definitive causality, preliminary investigations strongly suggest that the collapse of a glacier and its bedrock contributed significantly to the flash floods that struck the Trishuli River basin. This is not an isolated incident. The area has seen increased climate-related disasters over the past few years—from cloudbursts in 2024 to glacial lake bursts in 2025, each one highlighting a growing pattern of instability.

"We should not be putting all our eggs in one basket in these dangerous times," said renewable energy expert Kushal Gurung. "We need to seriously embrace other alternatives as well, like solar and wind."

The NEA's own Rajan Dhakal admitted that the time has come for a fundamental rethink of the nation's hydropower policy. He pointed out that even if climate risk assessments were properly conducted, many plants may not have been designed with resilience in mind.

Foreign Investment and Risk Misalignment

International investors have poured billions into Nepal's hydropower projects, including the Upper Trishuli-1 project valued at $647 million—backed by institutions like the Asian Development Bank and the International Finance Corporation. Yet despite warnings, these entities failed to implement robust preventive measures.

Himanshu Thakkar of the South Asia Network on Dams, Rivers & People criticized this lack of accountability: "Their own reports repeatedly highlighted it. But they did not take any preventive steps, did not demand stringent checks and balances, nor were they prepared for a calamity they knew could occur."

These investments have become increasingly risky. Private operators are now facing insurance payouts exceeding $40 million over the past three years, with premiums rising so steeply that operating costs are becoming unfeasible.

Resilience vs. Reliability: A Critical Reevaluation

As climate impacts intensify, Nepal finds itself caught between two realities: its energy dependence and its vulnerability to environmental disruption. Experts suggest that diversifying power sources—especially through solar and wind—is critical to long-term stability.

• The German aid agency estimates that solar power has the technical potential to generate up to 10 times more electricity than hydropower in Nepal.
• However, this transition is not simple; even as other energy forms gain traction, hydropower remains Nepal's strongest comparative advantage within South Asia.

Yet the stakes have never been higher. Manjeet Dhakal from Nepal's climate delegation at the UN Climate Change Conference underscored that while the country is among the least responsible for greenhouse gas emissions, it now bears the brunt of global warming's effects.

"Ironically, our hydropower industry is an attempt to reduce our already minimal emissions... We cannot, and should not, be made to respond to these risks alone."

The Human Cost of a Technological Gamble

Over 1,300 people died in the recent floods, and thousands more are still missing. Hundreds of laborers, engineers, and residents remain trapped inside damaged hydropower tunnels, adding another layer to an already tragic situation.

This tragedy isn't just about infrastructure—it's about lives. It's about how a nation that once saw itself as environmentally progressive has now become vulnerable to its own green energy dream.

What Comes Next?

The road ahead is uncertain. Nepal must balance its current economic dependence on hydropower with the urgent need for climate resilience. For too long, the country's energy strategy has been like a house built on shifting sand—seemingly stable, but fundamentally unstable under pressure.

What's needed now is a complete overhaul of the energy landscape, one that incorporates not only new technologies but also new governance models. The government must prioritize safety over profit, and international actors must assume responsibility for their investments in high-risk zones.

We are not here to judge Nepal's past decisions, but to hold them accountable for what happens next. This disaster should serve as a wake-up call—not just for Nepal, but for the global community that continues to invest in vulnerable infrastructure under the guise of progress.