Nepal’s Hydropower Ambitions Exposed by Devastating Floods

Nepal’s reliance on large-scale hydropower investment has come under intense scrutiny following catastrophic floods that have devastated key infrastructure, including the Upper Trishuli-1 project, one of the country’s most significant foreign direct investment ventures valued at approximately $647 million. The disaster has reignited debates about whether climate risks were adequately considered by backers such as the Asian Development Bank and the International Finance Corporation.

The Upper Trishuli-3A project, severely damaged in the same event, was funded by China’s Export-Import Bank. Critics argue that international lenders were well aware of the dangers posed to workers, residents, and ecosystems in the region. Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers & People, stated that despite repeated warnings in their own reports, these institutions failed to implement preventive measures or demand rigorous safety checks for a calamity they knew was possible.

The Trishuli River basin has a volatile history. In September 2024, an unprecedented cloudburst triggered flash floods across Rasuwa, Nuwakot, and Dhading districts, areas that were again among the hardest hit last week. This followed a July 2025 incident where a glacial lake burst in Tibet’s Gyirong county, sending debris and water downstream into Nepal, killing at least 11 people and damaging critical infrastructure.

The earlier flood also disrupted trade along the busy Nepal-China corridor, leading to a border closure that lasted nearly six months until its reopening on January 1. Dhakil from the Nepal Electricity Authority acknowledged that even with correct climate risk assessments, plant designs often failed to reflect those findings, signaling an urgent need to improve construction and operational standards.

The financial toll on private operators is mounting. Uttam Bhilon Lama of the Independent Power Producers’ Association of Nepal reported that insurers have paid out around $40 million for flood damage to over 20 privately owned plants in the past three years. He warned that rising insurance premiums are making the cost of doing business increasingly unfeasible.