The government has set a target of producing 30,000 megawatts of electricity within the next 10 years. The target has been included in a draft of the national commitment prepared by the government.
The government made the draft public on Tuesday, incorporating the election commitments of six political parties. While the previous government had set a target of 28,500 megawatts over the next decade, the new target increases this by around 1,500 megawatts. Currently, the country has an installed capacity of about 4,000 megawatts.
At present, around 12,000 megawatts of projects are awaiting Power Purchase Agreements (PPA), while approximately 3,000 megawatts are under construction at various stages. Neighboring India alone is developing about 5,000 megawatts of hydropower projects. India has already signed an agreement with the Government of Nepal to purchase 10,000 megawatts of electricity from Nepal within 10 years.
Meanwhile, according to data from the Energy Commission, Nepal has the economic and technical potential to generate around 72,000 megawatts of electricity under Q40 conditions (design discharge—the volume of water flowing in a river that is available at least 40% of the time in a year). If electricity is generated under Q25 conditions, the country could produce up to 120,000 megawatts, according to the commission.
The government has committed to achieving the 30,000-megawatt target within the next 10 years by amending laws related to land, forests, and the environment, along with implementing policy reforms. It has also stated that priority will be given to reservoir-based and semi-reservoir projects, with project development supported through viability gap funding.
Large projects such as the Budhigandaki Hydropower Project and Dudh Koshi Hydropower Project will be developed using viability gap funding. For the 1,200-megawatt Budhigandaki project, a company has already been established and its investment framework approved. Environmental studies, detailed design, and other required assessments have been completed, and about 96% of compensation distribution has already been finalized.
Similarly, the government plans to attract energy-based large industries, such as steel, cement, herbal processing, data server stations, and chemical fertilizer industries. Alongside electricity generation, private sector participation will be encouraged in storage, transmission, and distribution systems through investor-friendly policies and legal frameworks. The government has also stated it will expand transmission lines to industries to increase domestic electricity consumption.
An integrated energy development plan will be formulated, and energy production and resource mobilization will be carried out under public-private partnerships (PPP). Internal and cross-border transmission lines are expected to be completed within the specified timeframe.
Through energy diplomacy, the government aims to strengthen bilateral and regional cooperation and expand energy trade with neighboring countries, including India and Bangladesh. Nepal has long been engaged in electricity trade (import and export) with India, and since 2024, it has started exporting around 40 megawatts of electricity to Bangladesh.
To develop Nepal as a clean energy export hub in South Asia, the government plans to increase investment in clean energy production, transmission, and distribution systems. It also aims to prioritize green hydrogen production and the exploration of strategic minerals such as rare earth elements. The commitment further states that Nepal will be developed as an energy-friendly nation through the promotion and export of green energy. The Green Hydrogen Policy 2023, is currently in implementation, although a related law has yet to be enacted.
Annapurna
