Current Status, Problems and Prospects of Water Resources and Hydropower in Nepal

GP Chudal

Nepal is a water-rich country with numerous rivers, lakes, and glaciers. It has abundant water resources, including surface water, groundwater, and snowmelt. Nepal has over 6,000 rivers and rivulets that flow throughout the country, and the country’s total annual surface water potential is estimated to be 225 billion cubic meters (BCM). Furthermore, Nepal has over 6,000 glaciers covering an area of 5,324 square kilometers, serving as an important water source for the country. This article will explore the Current Status, Problems, and Prospects of Water Resources and Hydropower in Nepal.


Current Status of Water Resources in Nepal:

Despite having an abundance of water resources, Nepal’s distribution of water resources is uneven. Some areas of the country have more water resources than others, which can result in disparities in water resource access for different communities. Furthermore, Nepal faces difficulties in effectively managing and utilizing its water resources. The country has only used about 2% of its potential surface water resources, and data on the quality and quantity of groundwater resources in the country is scarce. Water quality is also a major concern, especially in urban areas where industrial and domestic waste is dumped into rivers and streams.

So, Nepal needs to do a better job of managing and using its water resources to ensure everyone has access to safe drinking water and that this valuable resource is managed in a way that will last for generations to come.

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Here is the current status of Nepal’s water resources:

Surface Water Resources: With over 6,000 rivers and rivulets flowing throughout the country, Nepal has abundant surface water resources. The Department of Hydrology and Meteorology (DHM) says Nepal could have 225 billion cubic meters (BCM) of surface water every year. However, the country has realized only about 2% of this potential.

Groundwater Resources: Groundwater is an important water source in Nepal for domestic and agricultural use. A United Nations Development Programme (UNDP) report says that about 80% of Nepal’s rural people drink water from the ground. However, the country’s groundwater resources are poorly understood, and there is little data on their quality and quantity.

Glaciers and Snowmelt: Nepal has many glaciers and snow-capped mountains that provide an important water source for the country. Nepal has over 6,000 glaciers covering an area of 5,324 square kilometers, according to a report by the International Centre for Integrated Mountain Development (ICIMOD). These glaciers and snowmelt significantly contribute to the flow of rivers in the country, especially during the dry season.

Quality of Water: Water quality is a big problem in Nepal, especially in cities where waste from factories and homes is dumped into rivers and streams. According to a World Health Organization (WHO) study, over 70% of Kathmandu Valley water sources are contaminated with coliform bacteria, which can cause waterborne diseases.

Problems of Water Resources in Nepal

  1. Uneven distribution of water resources: The uneven distribution across the country is one of the main problems with water resources in Nepal. According to a United Nations Development Programme (UNDP) report, some parts of the country have more water resources than others, resulting in disparities in water resource access for different communities. For example, the Terai region, which accounts for 17% of the total land area, has access to 73% of the country’s surface water resources, whereas the Hill and Mountain regions, which account for 68% of the total land area, have access to only 27%.
  2. Access to safe drinking water is limited: Even though Nepal has a lot of water, many people don’t have access to safe drinking water. According to a report by the World Health Organization (WHO) and UNICEF’s Joint Monitoring Program (JMP), 21% of Nepal’s population cannot access improved drinking water sources. Furthermore, water quality is a major concern, especially in urban areas where industrial and domestic waste is dumped into rivers and streams. According to a WHO study, over 70% of Kathmandu Valley water sources are contaminated with coliform bacteria, which can cause waterborne diseases.
  3. Inefficient use of water resources: Nepal has a total annual surface water potential of 225 billion cubic meters (BCM), but only about 2% of this potential has been used. This wasteful use of water resources is a big problem in Nepal. It makes it harder for the country to meet its growing water needs. The Department of Hydrology and Meteorology (DHM) in Nepal says that population growth, urbanization, and economic growth will cause water demand to rise by 50% by 2030.
  4. Climate change: Climate change is a major issue for Nepal’s water resources. The country’s glaciers and snow-capped mountains provide an important water source, but climate change hastened their melting. According to an ICIMOD report, the rate of glacier melt in the Himalayas has more than doubled since the turn of the century, and this is expected to impact the availability of water resources in the country significantly.
  5. Groundwater depletion: Groundwater is an important water source in Nepal for agriculture, drinking, and industrial uses. However, the over-extraction of groundwater has resulted in resource depletion in some parts of the country. According to a Ministry of Water Supply and Sanitation report, groundwater levels in some parts of the Kathmandu Valley have dropped by 4 to 5 meters over the last decade. This has caused the groundwater quality to worsen and made it more expensive for people and farmers to get water from the ground.
  6. Water-related disasters: Water-related disasters such as floods, landslides, and droughts can devastate communities and the economy of Nepal. According to a National Planning Commission report, the country experiences an average of 1,600 water-related disasters yearly, resulting in the loss of lives, infrastructure damage, and economic disruption. Climate change and poor water management practices are expected to exacerbate the effects of water-related disasters.
  7. Lack of data and monitoring: There isn’t enough information about water resources in Nepal, so it’s hard to devise good plans for using and managing the country’s water resources. According to a report from the International Water Management Institute (IWMI), Nepal lacks information about groundwater resources, water quality, and how water is used. Also, there isn’t enough monitoring of water resources, making it hard to track water availability and quality changes over time and find problems or chances to help. Nepal’s lack of data and monitoring is a big problem when managing water resources well.

Prospects of Water Resources in Nepal

Nepal has a lot of rivers, lakes, and glaciers, as well as a lot of other ways to get water. Nepal could become a regional hydropower, agriculture, and tourism center because it has about 225 billion cubic meters of water. In this part, we’ll discuss the future of Nepal’s water resources and the opportunities and challenges for managing and sustainably using them.

  1. Hydropower: Nepal has a huge amount of hydropower potential, with an estimated 83,000 megawatts of hydropower potential that can be used cost-effectively. However, currently, Nepal only produces around 1,000 megawatts of electricity from hydropower, which is less than 1% of its total hydropower potential. The government wants to increase the amount of hydropower that can be made to 15,000 megawatts by 2030. Achieving this target would require significant investment in hydropower infrastructure, technology, and financing. However, developing hydropower projects in Nepal has faced challenges related to land acquisition, environmental and social impacts, and a lack of private sector participation.
  2. Agriculture: Agriculture is the backbone of Nepal’s economy, contributing to 27% of the country’s gross domestic product (GDP) and providing employment to 66% of the population. Water resources play a critical role in agriculture, with 80% of the country’s arable land dependent on irrigation. However, the current irrigation system is inefficient, with only 30% of irrigable land being irrigated. There is a huge potential for improving irrigation systems and increasing agricultural productivity. The government has initiated several programs, such as the Agriculture Development Strategy and the National Irrigation Policy, to improve the irrigation system and increase agricultural productivity. Adopting modern irrigation technologies and developing small-scale irrigation projects could significantly improve Nepal’s agriculture prospects.
  3. Tourism: Nepal is known for its natural beauty, including the Himalayan mountain range, which attracts tourists worldwide. Rivers, lakes, and waterfalls, all of which have water, are very important to the tourism industry. The government has initiated several programs to promote tourism, including the Visit Nepal 2020 campaign, which aimed to attract 2 million tourists to Nepal. Promoting ecotourism, adventure tourism, and cultural tourism could significantly boost the prospects of the tourism industry in Nepal.

Challenges of Water Resources in Nepal

Even though Nepal’s water resources have a lot of potential, many problems must be fixed for their management and use to be sustainable. These challenges include:

  1. Climate change impacts, including glacial melting, changes in precipitation patterns, and increased frequency of extreme weather events, could impact water availability and quality.
  2. Uneven distribution of water resources, with some parts of the country facing water scarcity and others facing water-induced disasters such as floods and landslides.
  3. Lack of investment in water infrastructure, technology, and financing, hinders the development of hydropower, irrigation, and tourism.
  4. Inefficient and unsustainable water management practices, including over-extraction of groundwater, poor water quality, and inadequate monitoring and data management.

Having said that, Nepal has tremendous potential for sustainably managing and using water resources, including hydropower, agriculture, and tourism. However, addressing the challenges related to climate change, water distribution, investment, and management practices is critical for realizing the full potential of water resources in Nepal. The government, private sector, and civil society must work together to develop sustainable water management strategies and policies promoting inclusive economic growth and environmental sustainability.

Current Status of Hydropower in Nepal:

Nepal is a country blessed with vast hydropower potential. The country has an estimated 83,000 MW of hydropower potential, of which only a fraction has been developed. Hydropower has been identified as a priority sector for the country’s economic development, and significant investments have been made in the sector in recent years. In this section of the article, we will look at the current status of hydropower in Nepal, including installed capacity, generation, and prospects.

Installed Capacity:

As of 2021, Nepal has an installed hydropower capacity of 1,261 MW, which accounts for only 2.6% of the country’s total potential. The country has 25 operational hydropower plants, most of which are run-of-the-river (ROR) projects. The table below shows the installed hydropower capacity in Nepal:

Type of ProjectInstalled Capacity (MW)
Run-of-the-River (ROR)1,161

Source: Nepal Electricity Authority (NEA)


Nepal’s hydropower sector generated 4,664 GWh of electricity in the fiscal year 2020/21, which accounted for 32.4% of the country’s total electricity generation. The hydropower sector’s contribution to the country’s electricity generation has increased steadily over the past decade, with an average growth rate of 20% per year. The table below shows the electricity generation from hydropower in Nepal:

Fiscal YearHydropower Generation (GWh)% of Total Electricity Generation

Source: Nepal Electricity Authority (NEA)

Future Prospects:

The Government of Nepal has set an ambitious target of generating 15,000 MW of hydropower by 2030. The government aims to achieve this target through a combination of large-scale and small-scale hydropower projects, as well as cross-border electricity trade with neighboring countries. The table below shows the planned hydropower projects in Nepal:

Project NameCapacity (MW)Type
Budhi Gandaki1,200Storage
Upper Arun1,000ROR
West Seti750Storage
Lower Arun400ROR
Nalsing Gad410ROR
Karnali Chisapani240ROR
Total3,648 MW

Source: Investment Board Nepal

Problems of Hydropower in Nepal

For several decades, hydropower has been a significant source of energy in Nepal. Nepal has the potential to generate significant amounts of hydropower and become a leading exporter of renewable energy due to its abundant water resources. However, Nepal’s hydropower sector faces several challenges that impede its growth and development.

  1. Insufficient investment: Developing hydropower in Nepal requires significant infrastructure, technology, and skilled labor investments. However, the level of investment in the sector is insufficient to meet the country’s demand for electricity. According to the Ministry of Energy, Water Resources, and Irrigation, the total installed capacity of hydropower in Nepal is 1,239 MW, accounting for only 3.3% of the country’s estimated hydropower potential. The lack of investment in the sector has slowed the development of new hydropower projects and hampered the industry’s growth.
  2. Impact on the environment: Hydropower projects greatly affect the environment, especially water resources, and wildlife. Dams and reservoirs can change how rivers flow naturally, hurt fish populations, and disrupt the habitats of aquatic species. Furthermore, transmission line construction can result in deforestation and fragmentation of forest ecosystems. Hydropower project construction in Nepal has resulted in clashes with local communities and environmental activists. The country’s hydropower policy requires the completion of environmental impact assessments (EIAs) before constructing new projects. However, implementing these assessments has been inadequate, resulting in inadequate mitigation measures for the environmental impacts of hydropower projects.
  3. Technical Problems: Nepal’s hydropower projects face many technical problems, such as limited access to advanced technology, a lack of skilled workers, and bad infrastructure. The rough and difficult terrain of the country makes it hard to get equipment and materials to faraway project sites. Furthermore, the country’s limited capacity to produce and maintain hydropower equipment has resulted in a reliance on foreign suppliers, which can increase project costs and delays.
  4. Political instability: In Nepal, the growth and development of the hydropower sector have been slowed by political instability and a lack of consistency in policy. Frequent government and policy direction changes can cause project delays and uncertainty. Furthermore, a lack of transparency and accountability in the sector can lead to corruption and misappropriation of funds, further undermining the industry’s development.
  5. Problems with financing: Building hydropower projects cost a lot of money, and many Nepalese developers still have trouble getting the money they need. The cost of developing hydropower projects can be high, and financing can be difficult due to the sector’s risk. Also, the country’s financial sector isn’t as developed as it could be, and many banks and other financial institutions don’t know to evaluate the risks of hydropower projects.
  6. Lack of transmission infrastructure: Nepal does not have enough transmission infrastructure to help the hydropower sector grow. The country’s rugged terrain and difficult terrain make transmission lines difficult to build, and many remote areas lack grid access. Because of this, the country loses a lot of energy during transmission, making hydropower projects less profitable and slowing the sector’s growth.
  7. Social conflicts: Hydropower project construction can result in social conflicts with local communities affected by the projects. The construction of hydropower projects can result in the displacement of communities, the loss of livelihoods, and the destruction of cultural heritage sites. Furthermore, the distribution of benefits from hydropower projects is frequently uneven, leading to resentment and conflict among various communities. A lack of effective stakeholder engagement and consultation processes can exacerbate these conflicts and jeopardize hydropower project social sustainability.

Nepal has a lot of water and could make about 83,000 MW of hydropower. This makes it one of the countries with the most hydropower potential globally. Despite this potential, Nepal has only used a few of its hydropower resources. However, there are several opportunities in Nepal’s hydropower sector that, if realized, could help the country become a major exporter of clean energy. Here are some of the prospects for hydropower in Nepal:

  1. Export potential: Nepal’s strategic location between the world’s fastest-growing economies, India and China, allows the country to sell excess hydropower to India and China. Nepal has already made several deals with India to buy power, and hydropower exports to India could bring in a lot of foreign currency for Nepal.
  2. Climate change benefits: Hydropower is a clean and renewable energy source that can help to reduce greenhouse gas emissions and mitigate the effects of climate change. Nepal can reduce its reliance on fossil fuels and contribute to global efforts to combat climate change by developing its hydropower potential.
  3. Job creation: The development of hydropower projects in Nepal has the potential to create jobs and support economic growth. A skilled workforce is needed to build a hydropower project, and operating and maintaining a hydropower plant can lead to long-term jobs.
  4. Regional integration: Hydropower project development in Nepal can help to promote regional integration and cooperation. Cross-border transmission lines can be built to export surplus hydropower to neighboring countries, promoting energy security and regional cooperation.
  5. Rural electrification: Hydropower project development can help provide electricity to remote and rural Nepal areas where access to electricity is limited. Hydropower can help to improve living standards and economic development in rural areas by electrifying them.
  6. Diversification of energy mix: Nepal currently imports fossil fuels to meet its energy needs, making it vulnerable to changes in the price of oil worldwide. Nepal can reduce its reliance on fossil fuels and improve energy security by building hydropower plants.
  7. Getting money: When hydropower projects are built, the Nepalese government can get the money that can be used to pay for social and economic development programs. Hydropower revenue can help alleviate poverty and contribute to achieving Sustainable Development Goals.

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