Path to Sustainable Economic Development through Hydro-electricity in Nepal

My Take on Nepal’s Path to Growth with Clean Energy

How Sustainable Energy is Changing Nepal 🇳🇵

How It Started: Nepal’s Power Struggle

For years, Nepal had a big problem—electricity was scarce. We faced power cuts up to 15 hours a day! Back then, we needed around 1,000 MW, but we only got 300 MW in dry seasons (summer and winter) and maybe 700 MW when it rained a lot. It was tough. People cut trees for firewood, industries barely ran, and we spent a lot importing fuel. Health got worse too because of smoke from burning wood indoors, and our economy just couldn’t grow much—stuck below 4% for a long time.

I remember how hard it was. Most of us live in villages, and without power, life was a struggle. The government knew clean energy like hydropower could fix this, but they didn’t have enough money to build it themselves. Things had to change.

The Big Shift: Letting Private Companies Help

Nepal has tons of hydropower potential—about 83,000 MW, and 42,000 MW we can actually use. Back in 2049 BS (1992 AD), the government said, “Okay, private companies can join in.” But it took years to really get going. Around 2015, things sped up with public-private partnerships (PPPs). Now, in 2023, we’ve got 1,300 MW running, 2,500 MW being built, and a goal of 10,000 MW by 2025—mostly hydropower, some solar.

This changed everything. Since 2017, no more load shedding! Our economy’s been growing at 7.5% every year, and it feels like Nepal’s finally moving forward.

What We’ve Gained

Here’s what this energy boost has done for us:

1. All Clean Energy
• We use 100% renewable power now. No more importing fuel worth NPR 32.5 billion a year—that’s 10% of our GDP (around NPR 325 billion in 2023). That money stays here!
2. Easy, Green Power
• Over 90% of us have electricity now, up from 60% a decade ago. It’s clean, good for the planet, and helps us fight climate change.
3. Teamwork with Private Companies
• Private businesses and the government work together. Banks have to put 5% of their loans into clean energy, so we’ve got NPR 3.2 trillion (USD 3 billion) invested—10–12% of our GDP.
4. Healthier Lives
• With power, 2 million homes stopped using firewood. Less smoke means fewer sick kids—deaths from breathing problems are down 15% since 2017.
5. Growing Economy
• Industries run better now, using 70–80% of their capacity. Small businesses, which give jobs to 1.7 million of us, are doing great, pushing our growth to 7.5%.
6. Smart Industrial Growth
• Factories like cement and food processing use clean energy, growing without hurting the environment. It fits our goals for a better future.
7. Jobs and Fair Pay
• Hydropower projects made 50,000 direct jobs and 100,000 more in other areas. People near projects earn 20% more, helping villages catch up with cities.
8. Saving Nature
• Cutting fewer trees (down to 0.5% a year) keeps our forests alive. We’ve cut 2 million tons of carbon emissions too, which is huge for the Himalayas.
9. Feeling Stronger as a Nation
• No more blackouts make us proud. We’re using our rivers and mountains to stand on our own—it’s a big deal for Nepal.

Money Behind It

Banks are a big part of this. They’ve put NPR 3.2 trillion into hydropower and solar since 2015, thanks to a rule from Nepal Rastra Bank. Private companies cover 70% of new projects, from small rivers to big dams like Upper Tamakoshi (456 MW).

This saves us NPR 32.5 billion a year on fuel, helps industries pay more taxes, and even boosts our stock market—hydropower shares on NEPSE are up 50% since 2017. It’s a win-win.

Selling Power to Neighbors

Now we have extra energy, we’re selling it! Since 2021, we’ve sent 300 MW to India under a 2014 deal, earning NPR 10 billion in 2022. We’re working on selling to Bangladesh too—maybe 500 MW by 2025. With 10,000 MW soon, we could export 5,000 MW and make NPR 50 billion a year. Plus, we “bank” extra power with India for when we need it back. This cuts our huge trade gap (NPR 1.4 trillion in 2022) and builds our cash reserves.

Challenges We Face

It’s not all easy. Here’s what’s tough and how we can fix it:

1. Not Enough Money
• We need USD 10–12 billion for 10,000 MW by 2025, but cash is tight.
• Fix: Get help from big groups like the Asian Development Bank or sell green bonds.
2. Rough Land and Tech Issues
• Mountains and earthquakes make building hard. We lose 15% of power getting it to people.
• Fix: Build better power lines (400 kV) and use smart tech to save energy.
3. Slow Government Work
• Approvals and land deals take too long, annoying investors.
• Fix: Make it faster with a one-stop shop for permits.
4. Weather Problems
• Climate change messes with rain—dry seasons have 10% less water since 2010.
• Fix: Add more solar (1,000 MW by 2025) and try wind power.
5. Helping People Near Projects
• Big dams move families, and they want fair pay and homes.
• Fix: Share 5% of project money with them so they benefit too.

What’s Next: Nepal as a Green Leader

I see Nepal doing even more. By 2030, we could hit 15,000 MW and sell 10,000 MW to neighbors. It’s not just about money—it’s about showing the world how a small country like ours can grow smart and green.

We’ve learned that teaming up with private companies works, trading energy with India and Bangladesh builds friendships, and balancing growth with nature is possible if leaders agree. I’m excited for where this takes us—more jobs, stronger villages, and a Nepal we’re all proud of.