Nepal’s energy landscape is predominantly clean, with over 98% of its electricity generated from hydropower, making it one of the few countries with a near-entirely renewable energy mix. Per capita electricity consumption, however, remains among the lowest in South Asia at just 400 units or kWh, compared to India’s 1,255 kWh, Bangladesh’s 497 kWh, Sri Lanka’s 631 kWh, and Bhutan’s 5,500 kWh. Despite the slow progress, energy access in Nepal has expanded, with electricity coverage in the country reaching 99% through on- and off-grid renewable energy. Nepal’s community-led micro-hydropower projects have also contributed significantly. There are over 11,300 registered micro-projects, ranging from 32 kW to 345 kW, serving around 35,000 rural households and transforming lives.
Community-led micro-hydropower initiatives have been a cornerstone of Nepal’s clean energy journey. Community-managed micro-hydro projects have boosted local economies by supporting hotels, shops, and services like cyber cafés in tourism routes, while reducing firewood use in households, curbing deforestation, and improving health by eliminating indoor air pollution from fuel burning. Through rural electrification, Nepal has demonstrated a scalable model for sustainable development by providing affordable, clean energy access for communities.
In his latest speech, the UN Secretary-General emphasized that the world is moving towards an era of clean energy. The transition can lead to economic growth, energy security, and sustainable development, especially for a country like Nepal, which has been a leader in clean energy for years. But as the Secretary-General highlighted, the transition needs to be fast, fair, and inclusive, particularly for developing countries facing challenges like climate vulnerability and lack of financing.
Nepal’s reliance on hydropower, particularly run-of-the-river projects, presents challenges. Hydro projects that generate electricity without large reservoirs, though renewable and clean, are vulnerable to climate-induced variability. Nepal’s topography, with over 6,000 rivers and 220 billion cubic meters of annual runoff, offers substantial hydropower potential, 42,000 MW of which is economically viable. Yet erratic monsoons, flash floods, and glacial lake outburst floods threaten the infrastructure. These vulnerabilities emphasize the need for resilience planning for modern, climate-resilient energy systems.
To address these challenges, Nepal is diversifying its energy sources, particularly through solar power. Studies suggest that Nepal can generate up to 50,000 terawatt-hours (TWh) of solar energy annually, approximately 7,000 times more than its current electricity consumption. Micro-grid solar systems in rural areas, such as solar water-lifting systems, solar dryers, and solar-powered internet, have improved access to clean water, education, and agricultural productivity, particularly in remote areas. However, scaling solar faces hurdles, including limited flat land and underfunded grid infrastructure, with only 60 cents invested in grids and storage for every dollar in renewable power globally. Nepal has committed to generating 2,100 MW of solar by 2030. This reflects the country’s commitment to diversification, but achieving this goal requires increased investment and technical capacity.
Nepal’s efforts toward electric mobility are also an example of its progress. Seventy-six percent of vehicles sold in Nepal are electric, making it one of the world’s leading adopters of electric vehicles. Nepal should target electrifying public transport, using its clean energy foundation to reduce reliance on imported fossil fuels, which constitute 11% of primary energy use. By prioritizing electric mobility, Nepal can enhance energy security, reduce emissions, and drive industry development as surplus hydropower powers energy-intensive industries. This addresses the Secretary-General’s appeal to meet increasing energy needs with renewables, particularly in transport.
However, energy access still remains a critical challenge, particularly for the last mile of electrification and clean cooking. While the country has reached 99% electrification, the remaining 1%—often in remote, mountainous regions—is the hardest to connect. The cost of energy and grid reliability also pose barriers, with frequent supply disruptions due to insufficient infrastructure investment. In cooking, over 51% of households rely on solid biomass, and 44% use LPG, both of which contribute to emissions and health risks. The government aims to establish e-cooking as the ultimate clean cooking solution by 2030, promoting electric cookstoves to reduce dependence on biomass and imported fuels. This transition aligns with the UN’s emphasis on justice in the energy transition, ensuring cleaner, healthier energy options for rural communities.
To secure a strong energy future, Nepal must take action on multiple fronts. First, passing the Renewable Energy and Energy Efficiency Bill will provide a strong legislative basis for promoting diversity in renewables and efficiency. Second, investing in storage-type hydropower and solar schemes will balance dry-season power generation. Third, new funding vehicles, such as public-private and community-based partnerships, energy service companies, and green bonds, can mobilize the USD 46.5 billion needed by 2035 to fuel growing demand.
By managing climate risks, expanding access, and adopting new models, Nepal can build an equitable and sustainable future, as envisioned by the UN Secretary-General. Achieving lasting impact requires deep community engagement, building local ownership, and designing systems that equitably serve vulnerable populations. Prioritizing environmentally sound technologies is also crucial for a positive contribution to a sustainable future. The United Nations Office for Project Services (UNOPS), as a development partner, supports Nepal’s energy transition by bridging the implementation gap and turning national ambitions into results. UNOPS focuses on transforming national ambitions into tangible outcomes and fostering sustainable development and long-term project viability.
Partnerships, like the Southeast Asia Energy Transition Partnership (ETP) managed by UNOPS, foster a just and equitable energy transition and help countries achieve Paris Agreement objectives and Sustainable Development Goals. The ETP brings together diverse stakeholders, including governments, philanthropies, academia, and the private sector, to accelerate the energy transition across Southeast Asia. Similarly, the Africa Energy Transition Partnership supports governments, donors, and other stakeholders in accelerating the energy transition in Africa, finding sustainable ways to meet the continent’s growing energy needs. These partnerships demonstrate the critical need for collaborative efforts to advance clean energy goals nationally and globally.
For Nepal, achieving a just, inclusive, and sustainable energy future will require coordinated action, innovative financing, and technical expertise. With its proven experience in infrastructure development, procurement, and project management, the United Nations Office for Project Services remains committed to supporting Nepal’s clean energy ambitions, working hand in hand with the government, private sector, communities, and other development partners to advance national development, strengthen energy security, build resilience, and contribute to global climate goals.
Source: Republica- Komal Karki
