⏱ 4 min read
With its fast-flowing Himalayan rivers, Nepal sees hydropower as a key to its development. Lok Sewa often asks about the first power stations, the largest projects, the types of hydropower plants and Nepal’s electricity trade with India and Bangladesh. This note covers all of these in one place.
1. Early hydropower stations
| Project | Year | Capacity / note |
|---|---|---|
| Pharping | 1968 BS (1911) | 500 kW; first hydropower station of Nepal and one of the first in South Asia |
| Sundarijal | 1993 BS (1936) | About 640 kW |
| Panauti | 2022 BS | About 2.4 MW; built with Soviet help |
| Trishuli | 1967 AD | Built with Indian help |
2. Major projects
| Project | Capacity | Note |
|---|---|---|
| Kulekhani I (Makwanpur) | 60 MW | The only large storage (reservoir) project for many years |
| Kaligandaki A (Syangja) | 144 MW | Largest project for nearly two decades, from 2059 BS |
| Middle Marsyangdi | 70 MW | Run-of-river project on the Marsyangdi |
| Upper Tamakoshi (Dolakha) | 456 MW | Largest completed project; built with Nepali investment; fully running since 2078 BS |
| Arun III (Sankhuwasabha) | 900 MW | Under construction with Indian investment (SJVN), mainly for export |
| Budhi Gandaki | 1,200 MW | Planned large storage project |
| Pancheshwar (Mahakali) | About 6,480 MW (planned) | Joint Nepal–India project under the Mahakali Treaty |
3. Types of hydropower plants
| Type | Feature |
|---|---|
| Run-of-river (RoR) | Uses natural river flow; little storage; output falls in the dry season |
| Peaking run-of-river (PRoR) | Small pond stores water for a few hours to meet peak demand |
| Storage (reservoir) | Dam stores water for months; steady power all year |
| Pumped storage | Pumps water uphill when power is extra, then generates when needed |
Most of Nepal’s plants are run-of-river, so the country has surplus power in the monsoon and shortage in winter.
4. Institutions and electricity trade
- The Nepal Electricity Authority (NEA), set up in 2042 BS, generates, transmits and distributes most electricity.
- The Electricity Regulatory Commission regulates tariffs and licences.
- Long hours of load-shedding ended in Kathmandu and most of the country around 2074/75 BS, under NEA managing director Kulman Ghising.
- Nepal began selling electricity in the Indian power market in 2078 BS (2021) and exported power to Bangladesh through India in 2024.
- Nepal’s installed capacity has crossed 3,000 MW, with private (IPP) projects producing a large share.
- Theoretical hydropower potential is about 83,000 MW; about 42,000 MW is economically feasible.
5. Water treaties with India
| Agreement | Year | River and main point |
|---|---|---|
| Koshi Agreement | 2011 BS (1954) | Koshi barrage at Bhimnagar for flood control and irrigation, mostly benefiting India |
| Gandak Agreement | 2016 BS (1959) | Gandaki barrage at Valmikinagar for irrigation and power |
| Mahakali Treaty | 2053 BS (1996) | Integrated development of the Mahakali, including the planned Pancheshwar project |
The Koshi and Gandak agreements are often criticised in Nepal because most benefits went to India, which is why later agreements stress equal benefits.
6. Benefits and challenges of hydropower
| Benefits | Challenges |
|---|---|
| Clean, renewable energy from Nepal’s own rivers | Most plants are run-of-river, so winter shortage remains |
| Export income and less trade deficit | Weak transmission lines and slow construction |
| Replaces imported petroleum (electric vehicles, cooking) | High initial cost and long project time |
| Jobs and local development (roads, royalty) | Landslides, floods and glacial lake outburst risks |
| Supports industry and irrigation | Land acquisition and resettlement disputes |
7. Hydropower and Nepal’s economy
- Export: surplus monsoon power is sold to India and also to Bangladesh through India, earning foreign currency.
- Import substitution: electric vehicles, electric cooking and electric industry reduce the large petroleum import bill.
- Royalty: project royalty is shared 50% federal, 25% province and 25% local level, which helps local development.
- Investment: many projects are built by private companies (IPPs) and by public shares sold to local people.
8. How this topic is asked in the exam
- Objective: first power station (Pharping, 1968 BS, 500 kW), largest completed project (Upper Tamakoshi, 456 MW), potential (83,000 MW), NEA (2042 BS), and the water treaties.
- Short answer: “Differentiate run-of-river and storage projects” — use the table in section 3.
- Long answer: “Explain the possibilities and challenges of hydropower in Nepal.” Use sections 2–7, with data and suggestions.
📌 Key points to remember
- First hydropower: Pharping (1968 BS), 500 kW; second: Sundarijal (1993 BS).
- Kulekhani I (60 MW) is a storage project.
- Kaligandaki A (144 MW) was the largest for years.
- Upper Tamakoshi (456 MW, Dolakha) is the largest completed project, built with Nepali investment.
- Arun III (900 MW) is being built with Indian investment.
- Most plants are run-of-river: surplus in monsoon, shortage in winter.
- NEA was set up in 2042 BS; load-shedding ended around 2074/75 BS.
- Nepal sells power to India (since 2021) and exported to Bangladesh in 2024.
📝 Quiz
Test yourself: Hydropower in Nepal
Practise Early hydropower stations, Types of hydropower plants and Institutions and electricity trade with 50 questions. Each attempt picks 25 at random.
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