For nearly a decade, Nepal transformed itself from a nation plagued by chronic electricity shortages into a regional power exporter. Almost the entire national grid—nearly 100% of Nepal's electricity supply—now depends on hydropower, generating close to $200 million annually through sales to India and Bangladesh. Yet the very mountains and glaciers underpinning this economic success are now becoming a liability as climate change accelerates their collapse.
On 25 August 2026, a catastrophic glacial failure triggered devastating flash floods across the Nepal-Tibet border region. The disaster killed more than 1,300 people, with approximately 4,000 still missing, including 583 foreign nationals. The floodwaters obliterated entire settlements and caused severe damage to hydropower infrastructure across multiple river basins, exposing fundamental vulnerabilities in Nepal's energy strategy.
The scale of the damage to Nepal's power generation was immediate and severe. According to reporting, 431 megawatts of capacity—representing more than 10% of Nepal's total generation—was knocked offline. The state-owned Nepal Electricity Authority reported that 12 operational hydropower projects sustained damage, along with 15 facilities under construction. Operators remain uncertain whether any of the damaged plants can resume operation.
The Nepal Electricity Authority, which operates six of the 12 damaged facilities, initially assured households that electricity supply remained adequate. However, the authority's spokesman Rajan Dhakal acknowledged a stark reality: with climate-related disasters becoming more frequent,
the time has come for a rethink of our hydropower policy. In response to the crisis, Nepal halted power exports and announced plans to purchase electricity from India over the coming months to cover domestic shortages.
Nepal's dependence on hydropower represents a dramatic transformation from the nation's recent past. In 2010, only two-thirds of the population had access to electricity at all, and those connected to the grid endured power cuts lasting up to 16 hours daily. An aggressive expansion of hydropower capacity, combined with efforts to reduce corruption and increase energy imports from India to manage seasonal fluctuations, produced remarkable results. By 2018, most Nepali households enjoyed uninterrupted 24-hour power supply.
Today, Nepal operates 225 hydropower plants with more than 3,900 megawatts of installed capacity—sufficient to power approximately three million households simultaneously. Hundreds of additional facilities are either under construction or in the planning stages. Most are situated at high altitude in mountainous terrain, where fast-flowing water can be harnessed without requiring large storage reservoirs.
This strategy, however, has left Nepal dangerously exposed to climate hazards. The high-altitude regions of the Himalayas are warming at roughly 50% faster than the global average, destabilizing glaciers and creating unpredictable flood risks. Rescue teams freed two workers from a hydropower tunnel buried by debris nine days after the flash flood, underscoring the human cost of infrastructure built in vulnerable locations. Preliminary investigations have identified a collapsed glacier and its bedrock as the direct cause of the August 2026 disaster.
Nepal's Disaster Risk Reduction and Management Authority has previously reported that more than nine in 10 disaster events recorded between 2018 and 2024 were
related to climate. While scientists caution that firm links to climate change require further study, the pattern is unmistakable.
What lessons does the disaster hold for future hydropower design?
Nepal's former Energy Minister Kulman Ghising, who characterised the deluge as a
once-in-a-centuryevent, has called for fundamental changes to how plants are designed and sited. In remarks to environmental news outlet Mongabay, he stated that
we need to design the plants [to be more] resilient to the floods and, most importantly, adopt early-warning systems as well as robust emergency evacuation measures. Potentially hundreds of hydropower workers, engineers and residents remain trapped inside mud-filled tunnels since the floods struck.
The Nepal Electricity Authority has suggested that a strategic rethink could involve reservoir-based plants positioned outside high-altitude mountain zones. Such facilities would allow water to be stored and released according to demand, though they would entail substantial economic and environmental costs. Dhakal acknowledged that
even if climate risk assessments were carried out correctly, the designing of the plants may not have been done accordingly, and pledged that
clearly we will need to improve in the way we build and operate our hydropower plants.
Private operators are already facing severe financial consequences. According to Uttam Bhlon Lama of the Independent Power Producers' Association of Nepal, insurers have paid approximately $40 million for flood-related damage to more than 20 privately owned plants over the past three years. Insurance premiums are rising sharply, making the cost of operations
unfeasiblefor many businesses.
Should Nepal diversify away from hydropower?
A growing chorus of energy experts argues that Nepal has become too reliant on a single power source. Kushal Gurung, a renewable energy specialist who founded the clean tech firm WindPower Nepal, contends that
we should not be putting all our eggs in one basket in these dangerous times. He advocates for serious investment in solar and wind energy, requiring a fundamental revision of Nepal's energy policy, which currently favours hydropower development.
This view is supported by Vivek Shastry, a researcher at Columbia University's Center on Global Energy Policy, who argues that
meaningful additions of wind and solar generation is a resilience strategy that can limit single-point or interconnected electricity system failures in the future. A report from the German aid agency suggests that Nepal's technical potential for solar power generation is approximately 10 times larger than its hydropower potential.
However, other analysts urge caution about abandoning hydropower entirely. Puspa Sharma, a senior research fellow at the National University of Singapore's Institute of South Asian Studies, acknowledges that Nepal must diversify its energy sources, but warns this can be achieved
only to a limited extent. He emphasises that
while there is untapped capacity in wind and solar, hydropower really is the one that gives Nepal massive competitive advantage vis-a-vis its South Asian neighbours, citing comparative studies of renewable energy potential across the region.
Did international lenders overlook known risks?
Hydropower continues to dominate large-scale investment in Nepal, and climate activists contend that funding has persisted despite well-documented disaster hazards. The Upper Trishuli-1 project, nearly destroyed in the August 2026 floods, represented one of Nepal's largest foreign direct investment ventures, valued at approximately $647 million. Its backers include the Asian Development Bank and the International Finance Corporation. The Upper Trishuli 3A, also severely damaged, was funded by China's Export-Import Bank.
Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers & People, has levelled sharp criticism at international lenders, asserting they were
acutely aware of the extreme danger to which they were exposing thousands of labourers, officials, residents, rivers, infrastructure and landscape. He contends that
their own reports repeatedly highlighted it. But they did not take any preventive steps, did not demand stringent checks and balances, nor were they prepared for a calamity they knew could occur.
In response, the Asian Development Bank and International Finance Corporation told the BBC that the Upper Trishuli-1 project design
reflected findings from independent technical assessments that looked at the risks of flooding and landslides affecting the project site, using studies of the glaciers and glacial lakes and historical evidence available at the time. They stated that the early warning system was strengthened following a flood in 2024, and further risk assessment work was undertaken after another flood in 2025. Regarding the August 2026 disaster, they noted that
the precise causes of the August 2026 disaster, the extent of the damage, the performance of the Project's design, and protective measures including the early warning system, is being gathered and remains to be verified as well as assessed. The BBC has sought comment from China's Export-Import Bank.
Historical records demonstrate that the Trishuli River basin has a volatile history. In September 2024, an unprecedented cloudburst over the Trishuli and Bhote Koshi river basins triggered flash floods in Rasuwa, Nuwakot and Dhading—settlements that were among the hardest hit by the August 2026 disaster. Then in July 2025, a glacial lake in Tibet's Gyirong county burst and swept down the same river stretch into Nepal, killing at least 11 people, damaging critical infrastructure and halting trade along the Nepal-China corridor. The border crossing remained closed for nearly six months and had only reopened on 1 January 2026.
What is the scale of damage to Nepal's power infrastructure?
Assessments of the damage vary across different sources but all indicate catastrophic losses. According to , a ministry report found that 12 operational power projects totalling 431.1 megawatts sustained damage, comprising 406.1 megawatts of hydropower and 25 megawatts of solar capacity. The same report documented that 15 hydropower projects under construction, with combined capacity of 470 megawatts, also suffered damage. Other assessments have reported even higher figures, with one local source indicating that 13 hydropower projects were knocked out entirely, cutting 748 megawatts of capacity across the Trishuli and Bhote Koshi basins.
The Nepal Electricity Authority has calculated losses worth hundreds of billions of Nepali rupees across hydropower and transmission infrastructure. The financial impact extends beyond immediate reconstruction costs, as the nation must now purchase electricity from India to meet domestic demand while damaged facilities are assessed and repaired.
What happens next for Nepal's energy sector?
Nepal's energy ministry has announced that the country will purchase electricity from India in the coming months to cover shortages created by the export halt and generation losses. Operators are currently assessing whether damaged hydropower facilities can be restored to operation, a process that may take months or longer given the scale of destruction.
Rescue and recovery operations continue as teams reach remote areas and search for missing persons. The disaster has prompted calls for international cooperation on climate resilience. Manjeet Dhakal, a member of Nepal's climate delegation at the UN Climate Change Conference, has urged governments and international organisations to share data, assess impacts and develop early-warning systems jointly. He emphasised that
Nepal is among the least responsible for the greenhouse emissions that led to these exacerbated risks, and that
ironically, our hydropower industry is an attempt to reduce our already minimal emissions... We cannot, and should not, be made to respond to these risks alone.
Key Facts:
- More than 1,300 people were killed and approximately 4,000 remain missing following a glacial collapse that triggered flash floods on 25 August 2026 across the Nepal-Tibet border region.
- The floods damaged 12 operational hydropower plants and 15 facilities under construction, eliminating more than 431 megawatts of generation capacity—more than 10% of Nepal's total power output.
- Nepal halted electricity exports and announced plans to import power from India to cover domestic shortages while damaged infrastructure is assessed and repaired.
- Energy experts and officials are calling for diversification into solar and wind power, though analysts debate whether Nepal can reduce its dependence on hydropower without sacrificing its regional competitive advantage.
- International lenders including the Asian Development Bank and International Finance Corporation face scrutiny over whether they adequately addressed known flood and landslide risks when funding major hydropower projects in the region.
