Why Hydropower Projects in Nepal Get Delayed: Understanding the Bottlenecks in Development

Why Hydropower Projects in Nepal Get Delayed: Understanding the Bottlenecks in Development

Sharma Manan

College of water Conservancy and Hydropower engineering Hohai University,Nanjing, Jiangsu China

Rawat Sharma Samjhana,

School of public Administration Hohai University, Nanjing, Jiangsu China

Abstract

Nepals vast hydropower potential remains underutilized due to persistent delays in project implementation, undermining energy security and economic growth. This study investigates the systemic bottlenecks hindering large-scale hydropower development through mixed-methods analysis, including case studies of delayed projects such as Upper Tamakoshi (456 MW) and Budhi Gandaki (1,200 MW). Key findings reveal that political instability, bureaucratic inefficiencies, land acquisition disputes, protracted environmental and social impact assessments (EIA/SIA), technical-geographical challenges, financial constraints, and contractor performance issues collectively contribute to prolonged timelines and cost overruns. 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. Case studies highlight how natural disasters, governance failures, and socio- environmental conflicts derail progress. The delays perpetuate Nepals reliance on electricity imports, strain public finances, and erode community trust. Recommendations include institutional reforms to enhance inter- agency coordination, decentralized dispute resolution mechanisms, transparent stakeholder engagement, diversified financing models, and capacity-building for domestic technical expertise. Addressing these challenges is critical for Nepal to harness its hydropower potential, achieve energy sovereignty, and transition toward sustainable development.

Keywords: Hydropower Projects, Project Delays, Nepal, Political Instability, Land Acquisition, Environmental Impact Assessments.

1. INTRODUCTION

   Nepal, geographically located in the lap of Himalayas, has hydrological and geographical terrains that make it one of the most hydropower resource-endowed countries on per capita basis. According to the official data, Nepal has identified more than 83,000 MW and of these, some 42,000 MW of hydroelectric power resources considered to be technically and commercially viable (Shrestha et al., 2021: NEA, 2023). The country is endowed with over 6, 000 rivers, streams, and brooks and the mountainous topography offers immense possibilities as the country strives to diversify its energy mix from the current dependence on fossil fuel imports with clean, renewable and domestically generated electricity.

   Hydropower serves the most crucial purpose in the overall developmental vision of Nepal in the power sector viz-a-viz their goal and objective, including energy sustainability without depending on imported fuel, especially for power generation and generation of employment in rural and cities for industries. NEA report indicates that over 90% of Nepals energy generation comes from hydropower; therefore, it is apparent that hydropower dominates as a domestic source. Furthermore, hydropower expansion is closely tied with Nepals agenda of moving towards a green economy, the achievement of SDG 7 on affordable and clean energy, as well as an aim of becoming a hydropower exporter in South Asian region to its neighbor India and China (Bhattarai & Adhikari, 2020).

   Although the key economic sectors have identified hydropower as both viable and strategically significant, Nepal has been politically and technically challenged for decades in its ability to initiate, develop and commission large hydropower projects as planned. Hydropower development in Nepal has been plagued with problems of time overruns, cost escalations, uncertainties in policies and suboptimal returns. Key projects like the Upper Tamakoshi Hydropower Project (456 MW), which was planned to be complete in 2015, only got commissioned in the year 2021 due to challenges like the 2015 Gorkha Earthquake as well as the effects of covid 19 pandemic (Asian Development Bank, 2022). Likewise, the Budhi Gandaki Hydropower Project (1,200 MW) prepared more than a decade ago could not take-off because of controversies on land acquisition and financing (Thapa, 2022). The West Seti project itself has been in existence for more than two decades and it has suffered from investor pullout and delays and despite renewed attention regarding regional collaboration, it is still cloudy (World Bank, 2021).

   The problems of repeated delays in the project implementation point towards some underlying issues within Nepals hydropower governance and furthermore structural infrastructure environment. They are political instability, bureaucratic challenges, poor cooperation between agencies, environmental conformity issues, inadequate funding, and socio-economic issues with indigenous peoples. These cumulative delays not only add to the cost of generating energy but also extend Nepals dependence on electricity import Griffin, (2021) stated that in 2022, Nepal imported 700 GWh electrical energy from India with a huge cost.

   For the purpose of this research, the main Research Question is hereby stated: What factors have led to the delays in the hydropower projects development in Nepal and through an evaluation of major stalled or slow- moving projects? It uses official data, case descriptions, and relevant literature to define the main constraints and propose policy implications. To this end, it is important to appreciate the argued challenges in order to further future hydrological projects and policies in Nepal and to optimize the future prospects of hydropower projects in the country.

   Figure 1: the locations of key hydropower projects such as Upper Tamakoshi, Budhi Gandaki, West Seti, Arun III, and Upper Karnali.

2. METHODS

   The present research adopted both quantitative and qualitative designs in an effort to identify the root causes of delays in large-scale hydropower projects in the Nepalese context. The study therefore draws on documents including case studies, secondary literature, project reports and newspaper articles to provide detailed information on the factors causing delays in project implementation.

   Qualitatively, structured historiography was conducted through interpretive study of district specific project histories, policies, governmental and donor agency documents and stakeholders consultation. These sources offer some insightful information on the political, institutional, and environmental as well as social barriers to change. In addition, stakeholders opinions such as those from project officials, engineers, local community leaders, and policy experts as discussed in journals and other insiders interviews as and other open forums are used to complement documentary evidence. Such sources are especially helpful to explain informal processes such as inter-agency rivalry, corruption, and community resistance that are not easily found in official records (Adhikari & Ojha, 2021; Thapa, 2022).

   The quantitative aspect includes acquiring and processing quantitative data on project duration, cost estimates, work progress, and financing schedules. This entails comparing the planned and actual schedule start and completion dates, establishing a delay idex, evaluating the disbursement of funds, and quantifying the outputs of the technical activities. Incorporating data from NEA reports, IPPAN, and international organizations, this study finds out common constraints and measures the level of delay in terms of years and percentile of over-function (NEA 2022; IPPAN 2023).

   To provide a manageable framework for this research, the investigation is limited to large-scale hydropower projects defined as projects with a capacity greater than 100 megawatts and those that have faced implementation delays. Amongst these, the projects are also the most capital extensive and strategically crucial and are also typical examples of systematic issues in the whole sector.

   Table 1: Overview of Major Delayed Hydropower Projects in Nepal

   Project Name	Capacity (MW)	Start Year	Planned Completion	Actual/Current Status	District(s)
   Upper Tamakoshi	456	2009	2015	Completed in 2021	Dolakha
   Budhi Gandaki	1200	2010	2018	Still under planning	Gorkha, Dhading
   West Seti	750	Early 1990s	NA	Cancelled/Postpone d	Seti Zone
   Arun III	900	2018	2023	Under construction	Sankhuwasabha
   Tanahun	140	2014	2020	Still under construction	Tanahun
   Upper Karnali	900	2008 (MoU)	2014 (est.)	Delayed (PPA pending)	Surkhet, Dailekh, Achham

   These six projects are: Largest Segment: High relevance to National Energy Policy Adequate Documented Information: Together, they provide essential information on the structural and processual nature of hydropower development in Nepal. Upper Tamakoshi is an ideal domestic kind case whereas Budhi Gandaki can be a case of domestic independent financing The case of Arun III and Upper Karnali also depict that cross-border financing and foreign investment is not an easy cake walk. West Seti is perhaps one of the most iconic instances of project abandonment broadly associated with institutional and investor pullout while Tanahun is a case of slow progress on WB and ADB backed infrastructures in the rural areas (World Bank, 2020; ADB, 2022).

3. RESULTS

   This section discusses some of the case studies in detail to provide an analysis of the eight systemic factors that lead to the delay of large-scale hydropower projects in Nepal. These approaches clearly show that current political, institutional, legal-social, and procedural environments contribute to emerging time issues and increased expenditures. Some of the most compelling concerns include political instabilities, land acquisition issues, and bureaucratic concerns related to EIA/SIA in infrastructure projects.

   1. Political and Institutional Instability

      Political instability is one of the most persistent and inherent factors when it comes to project delays in Nepal. Nepal has been undergoing relatively frequent regime changes since the initial phase of the political democracy in the 1990s and more so after the civil war ended in 2006. Over the course of over two decades, from the year 2000 to 2023, there have been over a dozen distinct prime ministers each majority of the time belonging to a different political party or an alliance (Sharma & Khadka, 2021). This high turnover has caused significant disruptions of long-term development projects such as hydropower projects.

      Ineffective policy-making and policy intermissions have interrupted the projects progress, reoriented priorities, and slowed the approval process. For example, the Budhi Gandaki Hydropower Project which was considered as a national pride project has been hampered by political confrontation between governments some of which have even cancelled and re-tendered contracts for political and ideological reasons instead of efficiency (Bhattarai & Aryal, 2020).

      Further, it is observed that there is poor communication and cooperation between the government institutions involved in hydropower generation such as MoEWRI, DoED, IBN, and NEA. Overlapping authorities that emanate from these bodies leads to duplication of effort, decision-making traffic jams, and bureaucratic inefficiencies (Ojha et al., 2022). For instance, Arun III and Upper Karnali have suffered lengthened permit and license, PDA approvals, as well as PPAs.

      Figure 2: Timeline of Government Changes vs. Project Milestones

   2. Land Acquisition and Compensation Issues

      The second challenge that arises as a result is the process of land acquisition; the process is usually very slow due to issues such as disagreement on compensation, legal formalities, and opposition from various groups of people using the land. Land acquisition for hydroelectricity projects in Nepal is a legal and social issue involving the rights of indigenous people in Nepal. Most of the affected regions are rural, this entails that; actual cadastral surveying and demarcation may not have been done comprehensively or there could be disputes among the community members regarding ownership of the land.

      People are dissatisfied with low compensation rates and slow valuations of their land primarily for compensation in affected areas. For instance, in the Budhi Gandaki project, the displaced families have protested several times over what they consider to be low premiums paid by the government in compensation with little or no consideration for market value let alone the loss of source of livelihood (Ghale, 2021). Likewise, land acquisition for the Tanahun Hydropower Project was delayed for more than two years just because of bureaucratic pronouncements and non-procurement of payments.

      Most young firms do not secure financing unless they begin to build a physical asset, but the acquisition of land itself is a time-consuming process that entails approval from the district land revenue offices, local municipal councils, and several ministries. Also, the right of affected populations to receive information regarding their rights is not respected, resulting in suspicion and longer negotiations (Dhakal, 2020).

      Figure 3: Number of Land Disputes per Project

   3. Environmental and Social Impact Assessments (EIA/SIA)

      Third is the lack of appropriate time in the EIA and SIA process since they are procedural requirements under the legally binding EPA 2019. EIAs and SIAs were developed to ensure environmental sustainability and to protect the affected communities, but their actual application has been slow, inadequate with minimal resources, and political.

      Many of the reports used in EIA are of low quality with poor contents, outdated statistics, and inadequate field verification. As such, such reports are sent back and forth for rewriting many times, greatly contributing to the extension of project initiation. Nevertheless, in some other cases, EIAs are done while the approval from the Ministry of Forests and Environment (MoFE) can take years due to conflicting interests or lack of adequate documents (Subedi & Khanal, 2021).

      Community opposition also arises in specific cases where the EIA/SIA procedure is considered insufficiently participatory for the community or where the measures proposed in the reports are not well explained. These can make it hard for the construction project to proceed legally, socially, and may even have to stop. For example, the people living in areas impacted by Arun III and West Seti have had to complain f forced displacement in the absence of viable social measures; a move that has seen their acquisition of social license to operate delayed (UNDP, 2022).

      Figure 4: Flowchart of the EIA/SIA Process in Nepal

   4. Technical and Logistical Challenges

      The realities of the geography that Nepal has mountains, deep valleys, and high seismic risks make the development of hydropower even tougher in terms of technical feasibility and infrastructure challenges. Major hydropower facilities are usually constructed in rural areas or mountainous terrains which makes it difficult to transport most of the materials used in construction of these projects and in undertaking preliminary surveys, construction of roads, bridges and transmission lines, and creating tunnels. Such requirements elongate the pre-construction phase of a project and also lead to uncertainties in the overall duration (Paudel & Shrestha, 2020).

      For instance, the Upper Tamakoshi project situated in Dolakha District was significantly affected by the problems of monsoon, snow, and landslides which caused problems in constructing access roads all through the year. Moving equipment and materials across rough terrains were sometimes closed for operation for up to 6 months, while boring works were also closed down by high water ingress and geotechnical issues (ADB, 2022). Likewise, in the Sankhuwasabha and the Tanahun district in the mid-hill area it took longer to complete site preparation, foundation works, and technical amendments due to the unstable geological condition in the Himalayan regions.

      Furthermore, it is noteworthy that Nepal has a high level of vulnerability to natural disasters in terms of its hydropower infrastructure. The Gorkha earthquake in 2015 with a Richter scale measure of 7.8 caused both horizontal structures of several under construction hydropower projects and affected the diversion of governments resources with recovery measures which caused projects like the Upper Tamakoshi to be delayed by many years (NEA, 2022). The cofferdams, tunnels, and temporary camps in turn have been affected by annual monsoonal floods due to their proximity to glacial-fed rivers.

      Figure 5: Planned vs. Actual Construction Duration

   5. Financial Constraints

      The lack of reliable financing strategies for hydropower projects is another major hurdle as financing often remains unpredictable with inadequate disbursement of funds, excessive reliance on foreign credit and weak domestic fund mobilization. Hydropower projects involve heavy capital investment and any problem related to the availability of funds results in construction stoppages, payment arrears and contractors disputes.

      The Upper Tamakoshi project is partially financed domestically through NEA bonds and national institutions such as the Employees Provident Fund and Citizen Investment Trust and this also faced significant financing challenges that in some instances halted civil construction for long periods. Budhi Gandaki has been undone mostly due to absence of concrete funding as the Nepalese governments flip-flopped between Chinese and Indian financiers (Bhattarai & Aryal, 2020).

      While dependence on sources such as the World Bank or Asian Development Bank is unavoidable, the projects are encumbered with procurement, compliance, and environment frameworks, which while beneficial in the long-run may delay the disbursement and project implementation (IPPAN, 2023). A typical example of such a project is the Tanahun Hydropower Project wherein funding procedural ties such as ADB procurement and processing of funds from the Japanese International Cooperation Agency and the European Investment Bank took over two years to be completed which caused the delay at the field level.

      Figure:6: Financial Flow vs. Construction Progress Over Time

   6. Contractor and Workforce Issues

      The delay in the implementation of hydropower projects in Nepal is also attributed to lack of performance and disputes with the contractors. Most of the larger firms have followed Nepalese construction projects with very little perception on Nepalese working environment, labor laws, and geographical constraints. Furthermore, the decision-making processes of contractors: Political concerns or bidding wars frequently do not guarantee capability or effectiveness of a contractor.

      In the case of the Upper Tamakoshi, issues arose out of SinoHydros Chinese contractors inability to do the complex tunneling works which caused severe time overruns and disagreements over the performance guarantees. In addition, unrest in labor issues such as wages and salaries, safety measures, and the hiring of locals often paralyzed the project (Sharma & Bhandari, 2021). The same problems affected the west Seti project that was to be developed by CWE Investment Corporation but was withdrawn due to the negligence of the project development milestones and controversy resulting from the cancellation of the project.

      Continuing contractor/developer disputes as in cost increases, delay claims and quality differences have also led to increased uncertainty. Arbitration procedures, more often than not, take lengthy time to be completed which hinders progress. Some of the issues that have bedeviled the Budhi Gandaki project include issues to do with performance and the fact that the project was awarded to China Gezhouba Group Corporation (CGGC) lack work plan transparency (MoEWRI, 2022).

      Table 2: Contractor Performance Matrix

      Contractor Name	Project	Delay Index (%)	Cost Overrun (%)	Legal Disputes (Y/N)
      Sino Hydro	Upper Tamakoshi	42%	25%	Yes
      CWE	West Seti	Cancelled		Yes
      CGGC	Budhi Gandaki	Delayed	TBD	No

      These contractor-related challenges not only delay physical construction but also weaken stakeholder confidence in hydropower development, raise the final cost of electricity generation, and discourage future investment in the sector.

4. DISCUSSION

   This analysis shows that political and institutional factors, finance, and socio-environmental factors hinder Nepal hydropower sector development. These challenges not only cause breakage of schedule but also negate the claims of development in Nepal, hamper its energy sovereignty, and dissuade investment. In order to explain these systemic constraints in detail, this section highlights two examples of the implementation: The Upper Tamakoshi Hydropower Project and Budhi Gandaki Hydropower Project. These examples have the purpose of identifying several areas of challenges associated with hydropower development in Nepal varying from natural disasters to policy problems.

   Upper Tamakoshi Hydropower Project

   The Upper Tamakoshi Hydropower Project (UTHP) is of 456 MW capacity which is the largest Hydropower project of Nepal and funded 90% through Nepali funds through NEA Nepali Citizen Investment Trust Employee Provident fund and Nepali Telecommunications. Established in the Dolakha District, the project began in 2009 with the anticipated completion year of 2015. Nevertheless, power generation of the project initiated only in July 2021, which indicates the delay of six years (NEA, 2022).

   Some of the factors that contributed to the prolonged timeline include the following. The major catastrophes that took place included the 2015 Gorkha earthquake which affected the access roads, construction camps and underground formations. The earthquake was accompanied by landslides and several aftershocks that not only threatened the lives of workers but also made bringing materials in and out of the site challenging and demanded redesining of several civil parts (ADB, 2022). The disaster required NEA and its contractors to focus more and spend pooled resources on site consolidation and rebuilding.

   However, due to its geographical location, it was also closed to Calamities which are natural and other difficulties such as contractors. The main civil works were performed by the Chinese firm Sino Hydro that encountered main issues with the tunneling works because of the bad geological prognosis and the lack of proper technology. The construction of the main headrace tunnel boring also experienced several time disruptions due to rock burst, water intrusions, and mechanical failure. There were complaints regarding earlier variations in schedule and payment issues which caused time-bound negotiations and even arbitration between NEA and contractors.

   Additionally, interruption of international travels during the COVID-19 pandemic at the end of 2020 and early 2021 disrupted updates during the 2020-2021 academic year by restricting movements of technical staff as well as delivery of technical support and related materials. The lockdown also affected the human resource on-site as it reduced it greatly; most of the time, foreign engineers and supervisors could not be brought to Nepal to complete the installation and testing stage.

   Despite these hurdles, UTHP stands as a landmark achievement in Nepals energy landscape. When it started generating power, it boosted the national generation capacity by a near thirty percent, thus cutting the reliance

   on electricity imports. The successful completion of such a large project through domestic financing also embraced confidence in the national institutions. However, this extended period caused the total cost to rise by nearly 25% thus posing temporary financial threats to NEA and many participating institutions as highlighted by Sharma and Bhandari (2021).

   Figure 7: Gantt Chart Planned vs. Actual Timeline for Upper Tamakoshi

   Budhi Gandaki Hydropower Project

   Budhi Gandaki Hydropower Project being under planning, is one of the largest projected plants of Nepal with an installed capacity of 1200 MW and a multi-purpose dam to be constructed in Gorkha and Dhading districts. Initiated in the year 2010 and planned to be complete by 2018, as of the year 2025, the project has remained at the pre-construction stage, and no construction work is yet to commence (MoEWRI, 2022).

   The first problem is land acquisition and displacement which is the main cause of quiet diplomacy. BGHP is a reservoir type project and due to this, the project required the forced resettlement of more than 45,000 persons and therefore is the largest resettlement case in the countrys hydroelectricity sector (Ghale, 2021). Many people considered the initial compensation offers as unsatisfactory and protested, petitioned the courts and demanded the payment to be based on market value. These and others combined with confusion in govt communication damaged trust among those affected.

   Such a decision was coupled with political instability and fluctuations in development plans and policies. Although the project was advertised as a national priority project by the government, an MoU was initially signed with China Gezhouba Group Corporation (CGGC) that was later withdrawn in 2017 then revived when different political regimes came into power. These oscillative shifts between the state-led model of development and the foreign model have caused policy fluctuations and discouraged long-term planning.

   Additional social issues that have come to light include environmental issues. Some critics identified the EIA on the project as flawed, which never involved adequate consultation with the indigenous people or any widespread consultation; this raised the concerns from the international partners and the civil societies. Thus, environmental clearance has been only partial and not free from controversy; this added to adding more time to administrative approval (Subedi & Khanal, 2021).

   However, even while committing more than NPR 20 billion (approx. USD 160 million) for the preliminary works involving the compensation payment and the geophysical studies, the failure to formulate a definite financing strategy and the existing social unrest has remained problematic for the project.

   Figure 8: Project-Affected Area Map with Displacement Zones

   These two case studies illustrate how different combinations of natural, institutional, financial, and social challenges manifest in hydropower development. While Upper Tamakoshi ultimately reached completion due to political commitment and institutional resilience, Budhi Gandaki remains a case study in planning paralysis and governance failure. Together, they reflect the broader trends affecting hydropower infrastructure in Nepal and the urgent need for a systemic overhaul in project management, stakeholder engagement, and regulatory consistency.

   4. IMPLICATIONS OF DELAYS AND RECOMMENDATIONS

   Implications of Hydropower Project Delays

   These delays have twisted heavily on Nepals large-scale hydropower schemes and have dire national-level implications which significantly hampers the countrys energy security as well as other development goals and aspirations. These delays have implications across the economic, social, political spectrums and erode the communitys confidence in the management of infrastructure systems.

   In terms of direct and immediate impacts, the delays in hydropower production contributes to the continued importation of electricity from neighboring India. Even though Nepal has abundant hydropower resources the domestic capacity is being developed at a slow rate hence the need to buy power in some seasons or when generation locally is low. The NEA indicates that electricity import from India has crossed 700 GWh in the last fiscal year 2021 /22; the expenditure loss for the government and the consumers is merely in millions. These imports have had greater fiscal implications in the recent past, especially when projects such as Upper Tamakoshi and Tanahuns commissioning were lagging behind expected timeframe (IPPAN, 2023).

   Figure 9 : Nepals Annual Electricity Import 20102024

   Beside the effect on the economy, project delays have caused plummeting of citizens confidence in both local developers and politicians. Affected Communities; The project affected people like the Budhi Gandaki basin people complain of delayed compensation, incomplete relocation and unfulfilled development spending (Ghale, 2021). As for the ordinary population, they still suffer from electric power outages and voltage drop, which hinders work and degrades the living conditions mainly in winter when the climate is dry.

   These delays have also led to loss of development opportunities Among them are; Hydropower is not only the type of energy but also the cause of social and economic change. Delays stunt growth of jobs, limit development of energy-intensive industries, and limit Nepals capacity to sell electricity to other countries. Due to the progress in the regional power trade through forums such as BIMSTEC and BBIN, the slow- moving project pipeline of Nepal slows down the country in capitalizing such opportunities (ADB, 2023).

   RECOMMENDATIONS

   In order to tackle the systemic challenges highlighted throughout this study and unlock the hydropower opportunity in the country, the following should be done:

   First, there is a need to enhance institutional capability and inter-agency collaboration of the Nepalese organizations engaged in hydropower planning and implementation. The proposed inter-ministerial task force or the single-window project facilitation unit could help in eliminating unnecessary cross-approaches and duplication, and facilitate policy consistency after the political shifts (Ojha et al., 2022).

   Second, there would be overall gains to project performance as a result of decentralization of monitoring functions. Having regional offices with full decision-making power would help. Remoe consultants could make more prompt decisions regarding the rural land management conflict and peoples complaints related to cooperation with contractors. It would help make dispute resolution fast-track, like employing on-site arbitration or using a third-party mediator to help settle the issues before the case transforms into litigation. Third, transparency and accountability in exercising management and acquisition of environments and land are vital. To enhance the local acceptance and minimize the opposition, the EIA and SIA reports have to be

   published online, public hearings have to be conducted with constructive feedback mechanisms, and if possible, independent experts must be involved in the valuation processes (Subedi & Khanal, 2021).

   Fourth, Nepal should look for sources other than bilateral loans with political conditions for funding. Despite this, climate financing mechanisms such as public-private partnerships, green bonds, and others may provide flexibility and accountability. At the same time, investments in development of local technical capacities through university education and training of engineers and technical workforce, as well as through knowledge transfer would decrease reliance on foreign companies and enhance the sustainability of the projects.

   These interventions, if implemented systematically, can transform Nepals hydropower sector into a resilient and growth-oriented pillar of national development.

5. CONCLUSION

These are not mere one-off market issues, but persistent problems in Nepals hydropower sector that are endemic to the Nepali context. Hydropower development is hindered by complex and overlapping challenges including frail governance in some countries, political volatility in others, bureaucratic hurdles in land acquisition, environmental management, and project financing. All the same, both the Upper Tamakoshi and Budhi Gandaki projects make it clear that large, professionally staffed projects with significant resources cannot guarantee success where policy, coordination, and public support are absent even if they are highly necessary and important.

It is for this reason that unless sufficient changes are made in the power sector, its dream of making Nepal an electricity surplus country and being hailed as an exporter of electricity in the South Asian region will remain a pipe dream. The overall cost of delaysbe it in foreign oil imports or lost industrial prowessis growing, and the population is losing faith in the delivery of the infrastructural projects they need.

The solution has to be gradual, open, and professional. Developing institutions, decentralizing decisions, improving environmentalism, and investing on domestic capability are pursuing not simply sound governance; they are necessary for Nepals massive hydropower potential.

Abbreviations

1. ADB: Asian Development Bank

2. BBIN: Bangladesh, Bhutan, India, Nepal (initiative)

3. BIMSTEC: Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation

4. BGHP: Budhi Gandaki Hydropower Project

5. CGGC: China Gezhouba Group Corporation

6. CIT: Citizen Investment Trust

7. COVID-19: Coronavirus Disease 2019

8. DoED: Department of Electricity Development

9. EIA/SIA: Environmental Impact Assessment / Social Impact Assessment

10. EPF: Employees Provident Fund

11. EPA 2019: Environmental Protection Act 2019

12. GWh: Gigawatt-hour (unit of energy)

13. IBN: Investment Board Nepal

14. IPPAN: Independent Power Producers Association Nepal

15. MoEWRI: Ministry of Energy, Water Resources and Irrigation

16. MoFE: Ministry of Forests and Environment

17. MW: Megawatt (unit of power)

18. NA: Not Applicable

19. NEA: Nepal Electricity Authority

20. NPR: Nepalese Rupee

21. PDA: Project Development Agreement

22. PPA: Power Purchase Agreement

23. SDG: Sustainable Development Goal (e.g., SDG 7: Affordable and Clean Energy)

24. TBD: To Be Determined

25. UNDP: United Nations Development Programme

26. USD: United States Dollar

27. UTHP: Upper Tamakoshi Hydropower Project

28. WB: World Bank

CONFLICTS OF INTEREST

There are no conflicts of interest.

FUNDING STATEMENT

No funding

ACKNOWLEDGMENTS

I Manan Sharma would like to express my deepest gratitude to my supervisor, Professor Mao Jing Qiao for his unwavering support, guidance, and invaluable insights throughout the preparation of this manuscript. His expertise and encouragement have been instrumental in shaping this research, and his constructive feedback has greatly improved the quality of this work. I am truly fortunate to have had the opportunity to work under his mentorship.

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