Hydropower remains the cornerstone of Nepal’s major investments, even as climate advocates warn that financing persists despite acknowledged hazards.
The Upper Trishuli‑1 project, virtually wiped out by recent flooding, ranked among Nepal’s biggest foreign‑direct investments, valued near $647 million, with support from the Asian Development Bank and the International Finance Corporation.
The Upper Trishuli 3A, likewise heavily damaged, received financing from China’s Export‑Import Bank.
Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers & People, stated that international lenders were “fully aware of the grave risk they imposed on thousands of workers, officials, local residents, rivers, infrastructure and the surrounding landscape.”
“Their own assessments repeatedly flagged the danger,” he added, “yet no preventive measures were enacted, no rigorous safeguards were insisted upon, and they remained unprepared for a disaster they had foresaw.”
Thakkar notes that the Trishuli River basin has long proved unstable, citing floods in the past two years. In September 2024, an extraordinary cloudburst over the Trishuli and Bhote Koshi basins triggered flash floods in Rasuwa, Nuwakot and Dhading—areas that also suffered heavily from last week’s inundation.
In July 2025, a glacial lake outburst in Tibet’s Gyirong county surged down the same river corridor into Nepal, claiming at least eleven lives. The deluge damaged vital infrastructure and halted commerce on the bustling Nepal‑China trade route, keeping the border crossing closed for almost six months until it reopened on 1 January this year.
Dhakal of the Nepal Electricity Authority concedes that, even with proper climate risk assessments, “the design of the facilities may not have aligned with those findings.”
“It is evident that we must upgrade how we construct and operate our hydropower plants,” he said.
Private operators are already feeling the financial strain. Insurers have disbursed roughly $40 million for flood damage to over twenty privately run plants in the last three years, says Uttam Bhlon Lama of the Independent Power Producers’ Association of Nepal.
He warns that soaring premiums are rendering the business increasingly unfeasible.
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