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Nepal’s Hydropower Potential: Assessing the Viability of New Mega projects in a Changing Regional Environment Energy needs and caution of foreign investors
Nepal, blessed with abundant water resources due to its unique mountainous terrain, is actively seeking to establish itself as a significant player in the regional energy market of South Asia. Hydropower is seen not only as the key to economic prosperity and self-sufficiency, but also as an important source of export revenues capable of transforming the national economy. However, despite the enormous potential, the implementation of ambitious plans to build large hydropower projects (HPPs) faces numerous and multifaceted challenges.
The central question facing Nepal and its international partners is the viability of these capital-intensive megaprojects. This article offers an in-depth analysis of this question through the lens of three interrelated and critical factors: Nepal’s own internal challenges and barriers to hydropower development; the rapidly changing energy needs and import policies of neighboring countries, most notably India and Bangladesh; and, importantly, the often cautious and selective attitude of foreign investors weighing the potential benefits against the significant risks.
To provide a comprehensive coverage of the topic, the paper is structured by providing an overview of Nepal’s current hydropower landscape, a detailed analysis of key mega-projects under construction and planned, an assessment of the prospects and conditions of regional power markets, and an examination of the investment climate, associated risks, and lessons learned. The paper concludes with a comprehensive assessment of the factors affecting project viability and a strategic outlook for sustainable hydropower development in Nepal.
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By Alpha Business MediaNepal, blessed with abundant water resources due to its unique mountainous terrain, is actively seeking to establish itself as a significant player in the regional energy market of South Asia. Hydropower is seen not only as the key to economic prosperity and self-sufficiency, but also as an important source of export revenues capable of transforming the national economy. However, despite the enormous potential, the implementation of ambitious plans to build large hydropower projects (HPPs) faces numerous and multifaceted challenges.
The central question facing Nepal and its international partners is the viability of these capital-intensive megaprojects. This article offers an in-depth analysis of this question through the lens of three interrelated and critical factors: Nepal’s own internal challenges and barriers to hydropower development; the rapidly changing energy needs and import policies of neighboring countries, most notably India and Bangladesh; and, importantly, the often cautious and selective attitude of foreign investors weighing the potential benefits against the significant risks.
To provide a comprehensive coverage of the topic, the paper is structured by providing an overview of Nepal’s current hydropower landscape, a detailed analysis of key mega-projects under construction and planned, an assessment of the prospects and conditions of regional power markets, and an examination of the investment climate, associated risks, and lessons learned. The paper concludes with a comprehensive assessment of the factors affecting project viability and a strategic outlook for sustainable hydropower development in Nepal.