Floods Devastate Hydropower Infrastructure, Shattering Nepal's Electricity Export Dreams
Nepal recently suffered severe flooding that damaged multiple hydropower facilities, causing an instant loss of 431 megawatts (MW) of power generation capacity. The disaster forced Nepal to suspend some of its electricity exports to India and resume imports from India to maintain domestic power stability. The Nepalese government initially estimated the economic loss from this disaster at 50 billion USD, equivalent to one-tenth of the country's annual gross domestic product (GDP).
Nepal's hydropower sector has developed rapidly in recent years. Currently, over 200 hydropower plants are operational, with an additional 142 projects under construction, totaling 4,303 MW in capacity, and 148 projects in development, totaling 4,203 MW. In the 2024-2025 fiscal year, Nepal exported electricity worth 17.47 billion Nepalese rupees (NPR) to India, while importing only 12.92 billion NPR, marking its first year as a net electricity exporter. However, the recent floods disrupted Nepal's export plans, pushing the country back into import dependency.
Nepal has a population of approximately 30 million, with chronic underemployment driving around 600,000 workers abroad annually to countries such as Qatar, Saudi Arabia, and Malaysia. Workers overseas often earn monthly incomes of less than 400 USD, but their remittances account for over a quarter of Nepal's GDP, forming a critical pillar of the national economy. However, the remittance-driven economy has also triggered a 'Dutch Disease' effect, inflating domestic consumption and prices while eroding the international competitiveness of other export industries. Hydropower was once seen as the key to reducing Nepal's reliance on remittances, but this disaster has exposed the sector's vulnerability.