By Our Reporter
Nepal’s new target to generate 30,000 megawatts of electricity in the next 10 years sounds grand. A country with thousands of rivers, steep terrain, and years of hydropower rhetoric ought to be able to turn water into wealth by now. But one should remember that changing the target alone cannot move turbines and transmission lines.
The central problem is simple: the government wants private investors to build power plants, but it is not giving them the one guarantee that makes those projects bankable, the power purchase agreement (PPA). No PPA means no financing. No financing means no dam, no tunnel, no transmission line, and certainly no 30,000 MW. Humans do enjoy announcing mountains before checking whether the road exists.
The government’s policy and programme promises legal reforms in energy, forestry, land, and environment, along with a one-window system. These are sensible ideas. Developers have long complained that they must deal with more than 20 government agencies to build a single project. In a sector where timing determines costs, such delays are not minor inconvenience. They are the project.
Private developers say they can deliver much of the target if the state opens PPAs widely. That claim is not exaggerated. Nepal’s hydropower boom over the past decade has been driven largely by private capital, not by the state. But the current uncertainty over PPA modality has frozen momentum. The debate over take-and-pay versus take-or-pay has created a policy limbo that investors hate. A hydropower plant takes years to build and billions of rupees to finance. Investors will not gamble that money if the buyer, the Nepal Electricity Authority, may refuse to purchase electricity when supply exceeds demand.
That risk is exactly where the 30,000 MW target begins to wobble.
The NEA is reluctant to sign more PPAs because it worries about oversupply during the wet season and its own financial exposure. This concern is not irrational. Nepal already spills excess electricity during certain months and depends heavily on seasonal exports to India. Building generation without matching domestic demand, storage capacity, or reliable export markets could create stranded assets. In other words, Nepal could produce electricity it cannot sell, a classic way to turn infrastructure into debt.
The export plan itself carries uncertainty. Officials say 15,000 MW will be consumed domestically and 15,000 MW exported to India and Bangladesh. That assumes regional markets will absorb huge volumes consistently. But electricity trade depends on cross-border transmission, long-term agreements, pricing, and geopolitics. Nepal cannot base a decade-long national investment strategy on diplomatic optimism alone. South Asia is not known for making regional trade simple. It prefers drama.
The deeper issue is governance. Nepal has repeatedly announced large hydropower goals, 10,000 MW, then 15,000 MW, then 28,500 MW, and now 30,000 MW. Few of these targets were backed by a realistic implementation roadmap. Governments change, ministers rotate, policies shift, and every new administration behaves as if history began that morning.
The current administration has one advantage: a strong parliamentary position and political room to coordinate across ministries. That should, in theory, reduce the usual blame game between the Energy Ministry, Finance Ministry, NEA, and regulators. Yet even now, private sector stakeholders say they were not meaningfully included in designing the 30,000 MW plan. That omission matters because private firms are expected to carry much of the burden.
If the government is serious, it needs to move beyond slogans and tackle four things immediately.
Authorities need to clear the PPA backlog with a clear and open timeline, as more than 15,000 MW of projects are still waiting for agreements and the 30,000 MW target looks unrealistic without action. They should also set a stable legal system for approvals so politics does not keep disrupting the process. Increase electricity use by promoting electric transport, cooking, and industry so demand grows inside the country. Moreover, they must allow private companies to trade electricity so the Nepal Electricity Authority does not carry all the risk alone.
Nepal can realistically become a regional energy exporter. The rivers are real. Investor interest is real. Demand in the region is real. What remains uncertain is whether the state can stop obstructing the sector it keeps praising. The 30,000 MW goal is achievable in technical terms. Politically and institutionally, though, the bigger challenge may be generating trust before generating electricity.
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