Kathmandu — The government has allocated a budget of NPR 86.01 billion for the Ministry of Energy, Water Resources, and Irrigation for the fiscal year 2025-2026/2026-2027. Overall, the budget prioritizes energy self-reliance, expansion of irrigation infrastructure, hydropower export, and promotion of alternative energy. The government has set a target to generate an additional 942 megawatts of hydropower, thereby increasing the country’s total installed capacity to 4,800 megawatts.
The budget also mentions the construction of 732 kilometers of double-circuit national transmission lines. Aiming for significant achievements in the irrigation sector as well, the government plans to provide irrigation facilities to 14,000 hectares of land. Additionally, it has announced the construction of 63 kilometers of embankments and the protection of 270 hectares of land from river erosion.
To ensure energy security, the budget states that the government will finalize the investment framework and move forward with the construction process of large reservoir-based projects such as Dudhkoshi (670 MW), Lower Seti, Budhigandaki, Upper Arun, Tamor, and Kimathanka Arun, among others. The government has also announced that the construction of projects like Tamakoshi-5, Chainpur Seti, and Jagdulla will be expedited.
Diplomatic initiatives will be taken with neighboring countries to ensure electricity exports, and projects such as new Butwal-Gorakhpur, Inaruwa-Purnia, Chameliya-Jaulbibi, and others will be taken forward.
The government has allocated NPR 2.33 billion for the promotion of alternative energy sources (solar, bioenergy, and wind), NPR 8.50 billion solely for the expansion of irrigation infrastructure, and NPR 5.59 billion for the management of water-induced disasters.
Finance Minister Bishnu Paudel stated that a complete wiring project, including electric stoves, will be implemented in the major cities of all seven provinces. Additionally, the reconstruction of irrigation structures damaged by earthquakes or floods will be carried out swiftly.
1. To contribute to the country’s prosperity, emphasis will be placed on the sustainable utilization of water resources and on research and development in the energy sector. In line with the River Basin Master Plan, optimal use, conservation, and regulation of water resources will be carried out. For the utilization and management of underground water resources, water level measurement and digitization will be implemented.
2. The hydropower generation, transmission, and distribution systems will be streamlined. To ensure energy security, electricity production will be diversified. High priority will be given to the construction of large reservoir-based projects. Private sector investment will be encouraged in hydropower surveying, generation, transmission, and distribution.
3. For the energy mix, the development of small and micro hydropower, solar, and wind energy will be promoted. Different tariffs will be determined based on time for the demand and consumption of energy by industrial and residential customers.
4. A reliable electricity supply system will be ensured to increase domestic energy consumption. The remaining work of rural electrification will be completed within the next two years.
5. Based on the increase in energy production, diplomatic initiatives will be undertaken with neighboring and other potential countries to ensure electricity exports. Nepal’s presence in the regional electricity market will be strengthened.
6. In collaboration with universities and the private sector, a feasibility study on green hydrogen will be conducted. Domestic and foreign private investments will be attracted to produce green hydrogen.
7. If solar and wind energy are stored in batteries and integrated into the national system, arrangements will be made to sign power purchase agreements similar to those for reservoir-based projects.
8. The land acquisition for the 670-megawatt reservoir-based Dudhkoshi hydropower project will be completed, and construction work will begin. The Tanahun-based Lower Seti project, whose study has been completed, will be constructed with government investment. The Budhigandaki project will be built through a public-private partnership, and the government’s investment in this project will be converted into shares. Investment frameworks will be determined and construction work initiated for projects including Upper Arun, Kimathanka Arun, Nalagad, Phukot Karnali, Uttar Ganga, Tamor, Mugu Karnali, and Sun Koshi-3.
9. The construction work of the Tamakoshi-5 project will be accelerated. Within the upcoming fiscal year, construction will begin on the 210-megawatt Chainpur Seti and the 106-megawatt Jagdulla hydropower projects. The detailed engineering design of the Karnali Chisapani multipurpose project will be completed, and the investment framework will be finalized.
10. Under the People’s Hydropower Program, projects with high return potential will be developed through the management of the Nepal Electricity Authority and co-investment by interested Nepali citizens. The Detailed Project Report (DPR) for the Pancheshwar Multipurpose Project will be completed, and efforts will be made to advance the construction work.
11. Substations and transmission lines will be constructed in alignment with the completion schedules of hydropower projects. Policies will be adopted to sign power purchase agreements that maintain a balance between electricity production and consumption. Power purchase agreements will be made according to the take-and-pay concept for run-of-river projects.
12. If industries construct their own distribution lines from the national transmission system to the industrial site, arrangements will be made to allow them to charge a wheeling fee. The work of undergrounding electricity distribution lines in densely urban areas will be accelerated.
13. The construction of national and cross-border transmission lines with capacities of 400 kV for Khimti-Bardibas-Lapsiphedi, New Butwal-Gorakhpur, Dododhara-Bareli, and 220 kV for Chilime-Kerung will be advanced. The study of the 400 kV Inaruwa-Purnia and 220 kV Chameliya-Jhulaghat transmission lines will be completed, and construction will begin. To ensure regular electricity supply in Karnali Province, the construction of the 132 kV Kohalpur-Surkhet-Jumla transmission line will be completed within two years.
Additional cross-border transmission lines will be constructed based on the potential for energy export. A budget of NPR 1.318 billion has been allocated for the expansion of transmission lines and distribution projects.
14. Continuous, adequate, and reliable electricity service will be provided in industrial areas and other places with high electricity demand. Additional discounts on tariff rates have been arranged for productive industries that consume more than a certain number of units during periods of low electricity demand.
15. To replace traditional energy and LPG gas and increase the consumption of clean and renewable energy, the use of household appliances such as electric stoves will be promoted. To meet household energy needs through electric means, a complete wiring pilot project will be implemented in the seven major cities of the seven provinces.
16. Arrangements will be made so that information about electricity supply interruptions is automatically received at the distribution center and repairs are carried out immediately. Electricity leakage will be reduced.
17. Arrangements will be made to sell the electricity generated from multipurpose projects constructed with investment from the Government of Nepal and deposit the proceeds into the government’s reserve fund. The electricity produced from the Ranijamara-Kulharia project, as well as from the Bheri-Babai and Sun Koshi-Marin projects, will be sold, and the revenue generated will be deposited into the Government of Nepal’s reserve fund.
18. Carbon emissions will be reduced by increasing the production and consumption of alternative energy. Private sector investment will be attracted in solar, bioenergy, and wind energy. A budget of NPR 233 crore has been allocated for alternative energy.
19. Irrigation infrastructure will be developed to expand irrigated areas on cultivable land. The headworks, canals, tunnels, powerhouse, and distribution systems of multipurpose projects will be constructed simultaneously to ensure their completion together.
20. The Babai, Rani Jamara Kulriya, Mahakali, and Praganna-Badkapath irrigation projects will be completed within the next three years. The construction of the Sikta and Greater Dang Valley irrigation projects will be accelerated. For this, a budget of NPR 850 million has been allocated. NPR 207 million has been allocated to complete the construction of the headworks and powerhouse of the Bheri-Babai Diversion project within two years.
21. A budget of NPR 182 crore has been allocated for the maintenance, restoration, and management improvement of irrigation systems including Sunsari-Morang, Chandra Canal, Kamala, Narayani, Gandak, and Rajapur.
22. The construction work of the Sun Koshi-Marin Diversion project will be accelerated. By upgrading the Bagmati Irrigation Project and utilizing the additional water from the Sun Koshi-Marin diversion, irrigation facilities will be expanded to 122,000 hectares of arable land in the districts of Bara, Rautahat, Sarlahi, Mahottari, and Dhanusha. A budget of NPR 273 crore has been allocated for this purpose.
23. Over the next five years, lift irrigation facilities will be expanded in the cultivable terraces of the hilly and mountainous regions to provide reliable irrigation to 468,000 hectares. Construction projects to provide underground water irrigation facilities in the Terai and Inner Madhesh areas will be completed. A budget of NPR 331 crore has been allocated for this purpose.
24. Investment will be secured for the Naumure Multipurpose Project, and construction work will begin. The detailed study of the Kaligandaki-Tinau river diversion project will be completed, and the construction framework will be finalized. The study and preparatory work for the Tamor-Chisyang, Sun Koshi-Tawa, Trishuli-Lothar, Madi-Dang, and Gwar Khola multipurpose projects will be accelerated. A budget of NPR 37 crore has been allocated for this.
25. A quality and reliable weather information system will be developed. Appropriate technology and early warning systems will be adopted for managing water-related disasters.
26. Programs for river control will be implemented on major rivers such as Mahakali, Karnali, Narayani, and Koshi to manage the risks of river erosion, flooding, and landslides. The reconstruction of irrigation systems in areas affected by monsoon-related disasters and earthquakes will be accelerated. A budget of NPR 559 crore has been allocated for this purpose.
27. In 2025-2026/2026-2027, an additional 942 megawatts of electricity will be produced from completed hydropower projects, bringing the total installed capacity to 4,548 megawatts. Likewise, 732 kilometers of double-circuit national transmission lines will be constructed.
28. In 2025-2026/2026-2027, irrigation facilities will be extended to an additional 14,000 hectares of land. In terms of river control, 63 kilometers of embankments will be constructed, and 270 hectares of land will be reclaimed from river encroachment.
29. A budget of NPR 86.01 billion has been allocated for the Ministry of Energy, Water Resources, and Irrigation.
Source: Kantipur
