On the morning of August 26, Bal Bahadur Majhi, 50, was clearing firewood, rocks, and sand from the tunnel at the Rasuwagadhi Hydropower Project in Timure. The plant diverts part of the river into the tunnel and uses its steep drop to generate electricity.
Then he heard what he described as explosions in the distance. Before he could make sense of them, a landslide barrelled into the tunnel, and a slurry of mud, rocks, and water tossed him and pulled him under. When the water finally dropped to his neck, the tunnel was pitch dark and blocked.
“We never realised how dangerous it was,” he said. “They had told us to go in a particular direction if there was a flood; there had been a small one last year, but we never imagined something as disastrous could happen.”
For two days and two nights, Majhi stayed inside the tunnel with his co-workers, without water or food. They palmed their way through the darkness for an exit, but the flood had destroyed the walls, pillars, and water pipes. “We heard helicopters outside, and it gave us hope that someone would come,” he said.
Majhi does not recall how he and three others finally got out. His rescue by the Nepali Army remains a blur.
Hydropower has long been touted as Nepal’s “white gold” — a source of wealth and a pillar of the country’s ambitions for economic transformation. But as the country aims to generate 30,000 MW by 2035, increasingly destructive disasters are exposing the risks of that pursuit. The question now reaches far beyond one power plant: can Nepal turn its rivers into an engine of growth without putting workers, communities and its fragile Himalayan environment at greater risk?
Rasuwagadhi has become a stark example of Nepal’s cascading and compounding disasters. Three floods hit the plant in 15 months. The first was a glacier lake outburst flood (GLOF) in July 2025, then a sediment-laden flood in July 2026. In August 2026, a rock-ice avalanche on Langtang Lirung triggered another flood. The disaster killed or left more than 6,700 people missing and damaged 12 operating hydropower projects, 15 under-construction projects, and transmission lines. Losses are estimated at Rs150 billion, more than 90 percent of Nepal Electricity Authority’s revenue last fiscal year.
Despite warnings, Nepal has continued to put more plants and people along its rivers. Some energy experts consider the Rasuwa disaster a once-in-a-century event that should not derail Nepal’s plans. Others question whether Nepal’s pursuit of economic growth has kept pace with more volatile disasters, a changing climate, geopolitics and the needs of its own citizens.
“We need to revisit our goals,” said water expert Ajaya Dixit, who has authored several books including ‘Nepalma Bipad’ (Disasters in Nepal). “Maybe they are fine, but after the Rasuwa disaster, we need to pause and reflect. We can’t continue business as usual.”
Dixit says Nepal has designed its hydropower in silos, and that over the last 50 years, human intervention has changed the landscapes.
“Rivers are not what they used to be 100 years ago—we have diverted them, we have dammed them,” he said. “The processes within the hydrological cycle have changed. But our institutions, our knowledge base, our understanding, have remained rooted in an older imagination.”
Rush for ‘white gold’
Nepal’s hydropower boom took off in the last decade. Earlier, when there were fewer plants, the state-owned NEA owned most of them. As projects grew, Nepal developed its own pool of hydropower engineers, builders and designers.
Severe power cuts — with loadshedding lasting up to 18 hours a day at its peak — and the pursuit of prosperity drove more investment. State-sponsored campaigns such as “Nepal’s waters, [the] people’s investments” (Nepal ko pani, janatako lagani) urged citizens to buy hydropower shares rather than depend on foreign powers.
But the appeal went beyond nationalism. Hydropower was profitable. Selling shares allowed investors to recover their money without having their capital tied up in a plant for years, while power purchase agreements with the NEA offered a predictable market for the electricity generated, at contractually agreed rates.
“People were literally flying in helicopters, looking for bends in rivers,” said energy expert Satish Joshi. “The economics of hydro is essentially about catching the elevation difference — the shorter the distance over which that drop occurs, the better the site.”
Hydropower licensing has risen sharply in recent years, with the number of licenses issued annually more than tripling from 79 in 2024 to 241 in 2026.
“The private sector poured its life savings into Nepal’s hydropower,” said Uttam Bhlon Lama, senior vice president of the Independent Power Producers Association Nepal. “Today, the private sector generates more than 80 percent of Nepal’s electricity. Counting plants under development, that will soon be more than 90 percent.”
At what cost?
Hydropower accounts for only two percent of Nepal’s GDP. But given its potential, Nepal’s leaders see it as a “vital cross-border asset”. Writing in the NEA’s annual report before the Rasuwa floods in August, Energy Minister Biraj Bhakta Shrestha said: “We must act like the giant, multi-billion-dollar corporate enterprise that we are.” He urged the NEA family to “regard these milestones (exporting 2,794 GWh of energy) “not as the culmination of our journey, but as the foundation for an even more ambitious future.”
For now, the targets remain intact, said Mohan Kumar Shakya, joint secretary at the Ministry of Energy, Water Resources, and Irrigation. “We have formed a scientific committee to determine why the disaster happened and whether it will happen again. Its technical and policy recommendations will determine whether we need to modify the target,” he said.
For Dixit, however, the Rasuwa disaster exposed major gaps between policy and practice.
“Rivers have water, energy, biodiversity, and sediments. But modern water development focuses only on water and energy. This is the development model we inherited, that harnesses flowing water for energy at the cost of biodiversity,” he said.
Nepal now has 197 hydropower projects in operation, and an additional 260 plants under construction, and 241 with licenses for survey.
“This kind of disaster is the first of many to come. The government has handed out hydropower licenses so haphazardly that there is hardly any river untouched,” said hydroengineer Anugya Sapkota. “Sometimes the licences even overlap on the same stretch of the river.”
The NEA’s multiple roles limit independent oversight. It is the country’s principal electricity buyer, generator, transmitter and distributor, leaving few institutional checks on its decisions.
“Because governance is weak, any monitoring becomes an opportunity for rent-seeking. The lack of a truly independent agency in Nepal compounds this problem,” said Joshi.
All 11 experts interviewed for this story described the government’s environmental assessments as inadequate — some called them “a sham.” Human rights organisations have also documented violations of Indigenous communities’ rights and environmental safeguards, including in projects financed by the Asian Development Bank, the European Investment Bank, and the World Bank.
An investigation in Kantipur from August also shows developers forging Indigenous people’s signatures for free, prior and informed consent, destroying habitats of endangered species such as red pandas and golden masheer, and encroaching on up to 90 times more land than agreed. In some communities, developers blasted hills to build tunnels without adequate consultations, triggering major landslides.
“The developers are so stingy they don’t even release the mandatory 10 percent water flow and try to sell every last drop,” said Sapkota. Minimum flow requirements are intended to protect aquatic life and riverbeds, while limiting harm to downstream settlements.
Lama acknowledged the problem. He said the 2015 earthquake had dried up some water sources, but electricity-generation targets in the contracts were never revised. Developers were therefore caught between declining water supplies and contractual expectations, even as local communities and environmentalists pressed hydropower operators to release more water. Lama cautioned that changing these practices would take time.
“Companies are indeed not releasing even the minimum flow required,” he said.
If all planned projects go ahead, experts warn, Nepal could end up “piping” all its rivers.
According to Sapkota, the only stretches of Nepal’s rivers that are free of hydropower are inside national parks. “They must release 50 percent of the water in the rivers, and it isn’t profitable for the developers,” she said.
Who really benefits?
Hydropower has helped expand electricity access. More than 97 percent of households are now connected to the electricity grid, compared with 62 percent a decade ago. But a connection does not mean people can reliably use the electricity their country generates.
“Nepal has robbed its people of the benefits of hydropower,” said Bishal Thapa, who has worked in the energy sector for nearly three decades. “The [transmission] lines are so weak that every time there is a storm, they go down. If five pumps are switched on, the system stops working. People cannot even run motors for agriculture; they need three-phase lines, but there isn’t enough voltage to operate them.”
According to Thapa, the transmission lines will stretch for 60-70 kilometers in remote villages, when they should extend only 20 to 30 kilometers. “By the time the line reaches the last house in the village, there isn’t enough voltage to run even a simple fan,” he said.
Shakya said the NEA was working to improve the grid. But energy experts argue that the benefits of hydropower must also be measured in the royalties and jobs communities receive.
Under Nepal’s constitution, revenue from natural resources, including hydropower, is shared among three tiers of government: 50 percent to the federal government and 25 percent each to the provincial and local governments.
Karnali remains one of Nepal’s last free-flowing rivers, sustaining settlements and fisheries, and replenishing aquifers. But keeping it free-flowing raises a difficult question: how can communities benefit economically if hydropower is restricted?
“Try telling the people of the Karnali region that they won’t get any royalty because we want to keep Karnali free-flowing,” said Joshi, who argued that communities should not be deprived of economic benefits as a result.
Sanjib Oli, chair of Bigu Rural Municipality in Dolakha, home to Nepal’s largest operational hydropower plant, Upper Tamakoshi, questioned whether royalties had made a real difference.
“We get a meager royalty, and even that never comes on time,” he said. “There have been no new schools in the area since the plant was built. There is no paved road. They hire skilled labor from elsewhere, and even the vegetables they eat are imported.”
For many Nepalis, however, hydropower projects remain an important source of income, particularly during construction.
Raju BK, 28, whose cousin Bikram BK, 27, remains missing after the floods at the Upper Trishuli project, said the job had been the first regular wage anyone in their family had earned.
“We are Kami Dalits. We make sickle and spade, and in return people give us seasonal crops like corn,” he said.
Bikram earned Rs 16,000 a month, plus Rs 50 an hour for tunnel work, bringing his monthly income to about Rs 25,000 — about 26 percent above Nepal’s per capita monthly income. “It was hardly enough to support his two young children,” said Raju. “Unlike other people, we don’t own land and cannot farm to get by.”
Raju and other Dalit families in Pangsang are now worried about their future after the destruction of the hydropower plants.
What’s next?
The cycle of development, destruction, and rebuilding has put Nepal in a quandary, especially when it comes to hydropower.
Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers & People, says the choice is not between a lot of hydropower or none. “We need a nuanced position that recognizes the value of human life, learns from the past and minimizes future harm,” he said.
He called for an independent panel of experts to investigate what happened, identify what went wrong, and ensure that lessons are implemented. “Project developers and financiers must be held accountable for making hydropower projects safer,” he said.
Even if the Rasuwa disaster was an exceptional, extreme event, that does not explain why workers had no escape route, said Arun Bhakta Shrestha, a senior climate change specialist.
“A tunnel could collapse on its own. An earthquake could block it. It doesn’t have to be debris from a flood,” he said. “Where was the escape route in those cases? The fact that there wasn’t one is a huge gap. If we dismiss this as a once-in-a-century event, we will suffer again. It will happen again.”
Although underground power plants suffered less structural damage than those above ground, their tunnels became death traps for hundreds of workers.
“Why were hundreds of people working in the tunnels without a proper evacuation system? The hydropower companies will get their insurance and leave, but why weren’t the workers insured the same way as the infrastructure?” asked Thapa.
Experts also suggested halting construction during the monsoon, when the risk of floods and landslides is highest.
The failure to release even the mandatory 10 percent flow “points not only to poor compliance but to deeper problems of a regulatory system with no teeth to enforce and monitor its own rules,” said Thakkar. “If a project is required to have a functioning early warning system and it doesn’t, but no one checks and there are no consequences, of course there will be downstream disasters.”
Experts also want changes to how hydropower is governed. They recommended giving local governments a greater oversight role, separating the NEA’s conflicting roles as generator, buyer and seller, and expanding regulation beyond the Department of Electricity Development’s narrow mandate. The Water and Energy Commission Secretariat, they argue, is better placed to assess hydropower alongside its effects on communities and the environment.
Sapkota said the government could limit the number of plants on each river by controlling power purchase agreements, even though many licenses have already been issued. She also suggested moving plants farther downstream. This would not necessarily undermine the targets, she said, but could give communities more time to respond to floods.
Experts like Sapkota, Joshi and Kandel also called for basin-wide studies to determine how much hydropower each river basin can sustain. Rather than many small run-of-river projects, they suggested fewer, larger storage reservoirs that could regulate flows.
But Dixit cautioned that changing the location or type of plant alone would not protect infrastructure from a disaster on the scale of Rasuwa. The underlying problem, experts say, is that hydropower development has not adequately accounted for the distinctive conditions of Himalayan rivers.
“Nepal largely adopted hydropower technologies and design approaches developed elsewhere. But Himalayan rivers are very different — they carry enormous sediment loads,” said Shrestha, the climate change specialist. “Yet there is very limited research on how designs should be adapted to Nepal’s conditions.”
Climate change makes that adaptation more urgent. Although developers account for floods and earthquakes in their designs, GLOFs, landslides, and rock-ice avalanche floods are difficult to predict.
“Climate change is altering rainfall, snowfall, and glacier melt, bringing both excess water and drought,” said Shrestha. “More intense rainfall can also accelerate erosion, increasing the sediment carried by rivers and damaging hydropower infrastructure.”
Yet projects often ignore these changes or treat climate assessments as a box-ticking exercise. Projects being designed today must anticipate how conditions could change over the next 10 to 20 years and adapt, Shrestha said.
The challenge is paying for resilience. Private investors are wary of the extra costs of building plants to withstand extreme events. “Ultimately the cost of designing hydropower projects to withstand once-in-a-thousand year disasters such as Rasuwa would fall on ordinary people,” said Lama.
Others argue that investing upfront in resilience saves money in the long run. “For every dollar invested in strengthening a hydropower plant, four dollars in damage can be avoided,” said Shrestha.
Bibek Kandel, an energy expert and adviser to the energy minister, suggested that the country seek climate-justice funding to cover some of the costs, though he was skeptical it would come through. “Getting climate justice for Nepal will not be easy. But ask for it, and put your weight behind what you will do with that money,” he said.
The costs and risks of more resilient hydropower plants have also raised questions about Nepal’s 30,000 MW target.
“These targets, no matter which party is in power, tend to be politically driven. Technocrats are then brought in to justify the numbers,” said Shrestha. He called for rigorous research into how much power Nepal needs domestically, how much it can realistically export, and how much hydropower it should build.
That matters because Nepal’s export market is not guaranteed. India remains its principal buyer and the route to markets like Bangladesh. Yet India has restricted purchases from some Chinese-backed projects in Nepal, and its demand for Nepali electricity is a tiny share of its total consumption.
Kandel argues that energy has always been central to foreign policy and that Nepal should treat hydropower as a strategic asset. “The window is quite limited. Nepal should harness its rivers, without overlooking the disasters, and invest the profits elsewhere,” he said.
But it is unclear whether expanding generation would best serve Nepalis. Each megawatt of capacity costs around Rs. 240 million to build, while weak transmission continues to limit the reliable supply at home.
“Nepal’s electricity must benefit its people. Investment has to shift from supply to building transmission lines and keeping it affordable,” said Thapa.
Nepal depends on hydropower for over 95 percent of its electricity, leaving the grid vulnerable when disasters strike.
Vivek Shastry, a senior research associate at Columbia University’s Center on Global Energy Policy, recommends diversifying with solar and battery storage. “Everywhere in the world, especially with the squeeze in the oil and gas market, countries are considering how to diversify. There are calls for a serious look at how other sources of energy can play a role,” he said.
India’s experience shows that a grid heavy on solar can be volatile, he said, which is why sources need to complement each other, backed by battery storage, so supply does not depend entirely on the seasons. The costs of solar and batteries have fallen and are likely to keep falling, making them increasingly viable in South Asia, he added. “We need to upgrade grids and build more to connect South Asia.”
As Nepal investigates the Rasuwa disaster and weighs the future of hydropower, Majhi is left to reckon with what comes next on his own. Before the floods, one of the things he valued most about his job at Rasuwagadhi was being able to return to his village in Sindhuli every couple of months to see his family. Like millions of Nepalis who have migrated abroad for work, he had spent a decade in Malaysia.
After the floods, he was relieved that his company paid him for the 15 days he had worked that month. “I lost my money and my phone in the floods, because I had kept it safely in our hostel, but I don’t want to complain when so many people have lost their lives,” he said.
Majhi survived, but 812 workers remain unaccounted for in the tunnels.
“I will have to work again. I’ve endured so much in the hydropower that I will likely not go back, but I don’t have a lot of options,” he said. “I hope my children will never have to do the same work.”