They say you can choose your enemies, but not your neighbours. This rings true especially for small nation states bordering much larger ones.
And that is also what Mao Zedong told King Mahendra in Beijing in 1967, and it is the message successive Chinese leaders have given to Nepal’s rulers ever since: be clever, don’t rock the boat, learn to live with India.&nbsp;
In Beijing in 1988, Deng Xiaoping and Rajiv Gandhi demarcated each other's &nbsp;spheres of influence: south of the Himalaya India calls the shots, and north of it (including Tibet) China does.&nbsp;
Lila Nyaichyai, who did her PhD on Chinese Public Diplomacy in Nepal from Yunnan University, says China’s main concern in Nepal is stability.
“As a country grows to become a global power, its aspirations do too,” she says. “But China hasn’t cared much about whether Nepal is a monarchy, a democracy, or a federal republic as long as it is politically stable for development.”
Nepal’s royal rulers navigated the Cold War between the Soviet Union and the United States successfully, getting both to contribute to the country’s development. But the dramatic rise of India and China as global powers, and the fact that they are rivals in Nepal’s immediate neighbourhood has made the need for balance much more critical now.&nbsp;
A template could be the way Finland survived the Cold War between next door Soviet Union and the West. It did not join the Warsaw Pact, but its reference group was the other Nordics. The country decided to keep Moscow at arms length by appeasing it — a strategy that came to be called ‘Finlandisation’.
“Finlandisation was this attitude of yielding to pressure from a big brother,” Finnish journalist and author Katri Merikallio explained to me during a recent visit to Helsinki. “Finland remained independent, but its sovereignty was narrowed. There was a price to pay. We must acknowledge the risks that such a balancing involves, both for the sovereignty of a nation but also for internal politics.”
It was a survival tactic that saved Finland from being arm-twisted by the Soviet Union, like Hungary in 1956 and Czechoslovakia in 1968. But today with the Russian invasion of Ukraine, ‘Finlandisation’ is not in vogue anymore and Finland has joined NATO.
Nepal’s strategy of ‘equidistance’ between New Delhi and Beijing is somewhat similar to how Finland survived the Cold War. But it is a little more complicated than that. Indian strategists do not like the term ‘neutrality’ to characterise Nepal’s dealings with its regional rivals China and Pakistan.&nbsp;
South Asia is now in America’s blindspot with Trump’s turbulent second term, and without Washington’s countervailing presence geopolitics has become much more slippery than Prithvi Narayan Shah’s yam analogy.&nbsp;
Back in Kathmandu, former Foreign Minister Bimala Rai Paudyal of the UML contends that despite their differences, bigger countries do come to an understanding, often at the expense of smaller neighbours. An example of this is China’s refusal to get involved in Nepal's Limiyadhura dispute with India.
“It will not be easy, but we must maintain our policy of equidistance in dealing with India and China,” Rai Paudyal told us. “We must assure both that we are not a security threat, and that Nepal’s prosperity and stability is in their national interest as well.”
Nepal is the oldest nation state in South Asia, and has survived invasions, expansionist empires, and neighbours who do not see eye to eye with each other thanks to master strategists like Jang Bahadur Rana, Chandra Shumsher and King Mahendra.
Today, Nepal is one of the few remaining open societies in Asia with a free press, and a fragile yet rambunctious democracy. Yet feckless governments with leaders unskilled to steer a safe course in a volatile region means Nepal has never been as vulnerable to outside interference as it is today (page 1).
Here in Helsinki, NATO membership has finally finished off Finlandisation. It is a lesson for Nepal about how quickly the geopolitical terrain can shift and upend a nation’s established foreign policy doctrine. &nbsp;
Nepal needs to be supple and agile, pragmatic and self-confident. This will require monumental political reform marked by greater accountability, transparency, and good governance at home.&nbsp;
In other words, secure relations with our two giant neighbours needs sturdier domestic politics.
Sonia Awale in Helsinki

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Love thy neighbours

<figure><img width="4032" height="3016" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108111152/636a34e89c7e80680e048280jpeg.jpg" alt=""/><figcaption>Photo: NAMRATA SHARMA</figcaption></figure> A Helsingin Sanomat <a href="https://yle.fi/uutiset/osasto/news/daily_modern-day_slavery_pervasive_in_nepalese_restaurants/10715495?fbclid=IwAR00MnqJ7bP6k2rj3IziE3b6Ln2VWwGgmJF9vqiHm76JGng3a5aEQ4zahpo" target="_blank" rel="noopener">follow-up series this week </a>of a human trafficking ring operated by some Nepali restaurant owners in Helsinki has created an uproar in Finland, recently named the happiest country in the world. The investigative story by Paavo Teittinen builds on an <a href="https://www.nepalitimes.com/latest/nepali-restaurateurs-fined-in-finland/" target="_blank" rel="noopener">expose published in this newspaper in January</a> in which a Nepali cook, who uses the pseudonym Maila, mustered the courage to report injustices he faced to Finnish Police.  Maila is named ‘Suman’ in the Helsingin Sanomat story since he still wants his identity concealed because of threats after the Nepali Times story came out. Finland’s largest-circulation newspaper has now revealed widespread exploitation of Nepalis by Nepali employers in Finland.  The story in this paper had named four Nepalis (Basanta Adhikari, Purna Adhikari, Srijana Ghimire and Ava Pokhrel) who were found guilty by the North Sawo District Court in Finland. They had €227,199 confiscated, were fined for tax fraud and fake accounts, and forced to pay compensation to Maila, and co-workers Kancha and Saila. The main accused got a conditional sentence of one year eight months.  Helsingin Sanomat has now gone deeper into the story and exposed how a closely-knit circle of employers brought desperate Nepalis to Finland, and violated Finnish <a href="https://archive.nepalitimes.com/article/nation/Nepal-not-reforming-labour-laws,2687" target="_blank" rel="noopener">labour laws</a> by under-paying them and evading taxes.  <a href="https://www.nepalitimes.com/latest/nepali-restaurateurs-fined-in-finland/" data-elementor-open-lightbox="" target="_blank"> <img width="640" height="547" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108111152/636a34ec9c7e80680e048281jpeg.jpg" alt=""></a> After the Nepali Times story came out in January, Maila was threatened and this journalist was cautioned that powerful Nepalis named in the story could retaliate.  In fact, this reporter refrained from naming two others, Devi Sharma and Hemraj Sharma, who many Nepali workers had accused of being involved.   A Nepali woman brought to Finland as a maid was made to work 24 hours a day in the home and restaurants without proper salary. She complained to Finnish Police after being sexually abused. She had asked this reporter last year not to mention her case, fearing retaliation.   Now, Helsingin Sanomat has disclosed that after an investigating lasting two years Helsinki Police suspect the couple Devi and Manju Sharma of trafficking the woman.  Both are from Gulmi, and set up the first Nepali restaurants, of which there are now more than 70 all over Finland. Most of these are owned by a handful of Nepalis settled here, mainly from Gulmi.   The first Nepali restaurant, Himalaya, was established in Helsinki in 1993 by Devi Sharma who with his wife Manju now also own Lali Gurans, Gurkha and Yeti restaurants. Hemraj Sharma runs Mount Everest restaurant. Maila’s complaint to Police was against Purna Adhikary of another restaurant, Mount Sherpa.  During a visit to Helsinki in 2018, cooks and waiters told this reporter of exploitation, threats and slave-like working conditions. But they were afraid of being named  because the powerful restaurant owners could have them fired, or even deported. Despite meagre pay, they needed their jobs to pay back loans and send money home to families in Nepal. Many restaurant workers suffer depression, and some have attempted suicide. <figure><img width="640" height="479" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108111152/636a34ee9c7e80680e048282jpeg.jpg" alt=""><figcaption> </figcaption></figure>  Sources said up to 2,000 Nepalis have been brought to Finland on work visas in the past 20 years by restaurant owners. Besides flouting Finland’s labour laws, some Nepali restauranteurs are also involved in money laundering and tax evasion. Hemraj Sharma told this reporter during a visit to his Mount Everest restaurant in Helsinki in 2018 that Nepalis were doing well in Finland, and denied that they were involved in anything illegal.  However, the Helsingin Sanomat quotes the maid who used to work for Devi Sharma as telling police he under-reported earnings, evaded tax and stashed cash in his house which he regularly sent with Nepalis travelling to Kathmandu.  Juha Rekola, the International Ombudsman of the Union of Journalists in Finland, who has frequently visited Nepal to train journalists, says he often dined at the Nepali restaurants mentioned in the Helsingin Sanomat report, but did not notice signs of trafficking or tax evasion.   Said Rekola: “When I first read the piece in Nepali Times in January, I thought that it is good that the problem has been uncovered and brought to court. But when Helsingin Sanomat exposed just how widespread it was, I thought, oh no, it cannot be this bad, not in Finland. It hits you worse when you see it in your own language morning paper.” <img width="1500" height="1086" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108111152/636a34f19c7e80680e048283jpeg.jpg" alt=""> Rekola considers himself a well-wisher of Nepal, and says the blame has to be shared with Finns who ignore warnings that a cheap meal is proof of a grey economy.  “Nepali lunches are much cheaper given their quality and size, but people still go there trusting that it is ok,” Rekola adds, “our government has not put enough safeguards in place, making tax evasion easy. Tightened immigration laws also put many people in a vulnerable position to such blackmail.”  As for Maila, he feels vindicated after Finland’s most prestigious newspaper printed the plight of workers like him. “The risk I took by reporting his case to the police has yielded results, and this will help me and other like me,” said Maila, who still has not received the compensation that the court ordered the restaurant owners to give him.  <img width="1241" height="1754" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108111152/636a34f49c7e80680e048284jpeg.jpg" alt=""> The Helsingin Sanomat report has tarnished the image of Nepal, Nepalis and Nepali restaurants in Finland, and many Finns are said to be in a dilemma about whether to eat in Nepali-owned restaurants or not. On the one hand they want to help Nepal and do not want law-abiding Nepalis to suffer, and on the other they do not want to support traffickers. The Non-Resident Nepali Association of Finland has been accused on social media of protecting powerful restaurant owners, and not helping the exploited workers. In response, the Association’s National Coordination Council released a statement this week saying it had not protected anyone accused of wrong-doing.  Asked what is next, Rekola told Nepali Times: “I just hope the genuine Nepali restaurants do not suffer, and the customers return. There should also be closer contact between restaurant owners and their Finnish customers who love Nepal and Nepali food.”  Helsingin Sanomat will be putting up an English and Nepali translation of the series by Paavo Teittinen on its digital edition this weekend.   (The original text of this story was updated at 10:00 Nepal Time 3 April)

Finnish paper exposé on Nepali restaurants

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101136/636a23089c7e80680e0417c4jpeg.jpg" alt="" width="1133" height="720"/>Nepali restaurants in Finland have become so popular in the past 20 years that in many places they have started replacing Indian diners in Helsinki and other cities. It now looks like there was a dark side to this success: four Nepalis restauranteurs in Finland have been found guilty of human trafficking, discrimination and tax evasion.One of the Nepali migrant restaurant workers, Maila, was brought to Finland by an accused to work in Mount Sherpa restaurant in the town of Kuopio in Varkaus district court. Police started investigating the establishment after he filed a complaint, and found two more Nepalis were also underpaid.After the verdict, Maila has had to endure threatening messages from his former employers. “I was aware enough to know my rights, but most Nepalis who come here are not. I wanted to show fellow Nepalis that they have to be aware of the risks,” he says.There are a range of Nepalis in Finland from engineers and managers, teachers, as well as students who sometimes work on the side as cooks and waiters. Earnings are good, and Nepali restaurants have become popular in Finland with their modified menus that combine naan and curry combined with dal bhat and momos.But beneath the surface, there have been indications that all is not well. There was no problem if they worked in Finnish companies as the labour laws are clear and strict. But when workers are brought to Finland through personal connection, they have to accept the salary offered so they can pay back loans.  Few Nepali workers are not willing to talk for fear of losing even the jobs they have, but the Finnish press has reported on South Asian restaurants selling work visas, trafficking, and violating Finnish labour and tax laws.Last month, Finnish District Court Judge Minna Koskinen from North Sawo District Court found four Nepalis Basanta Adhikari, Purna Adhikari, Srijana Ghimire and Ava Pokhrel  guilty, fined them a total of € 227,199 and sentenced the main employer to prison for 1 year and eight months and another to six months. They also had to compensate Maila, Kancha and Saila with back pay.Maila has a masters degree in Business Management, but could not find a job so took cook training to work abroad. When a friend approached him to go as a cook to Finland where his brother owned a Nepali restaurant, he readily agreed to migrate.An agreement he signed with the owner set a full salary as per Finnish government rules, and working hours stipulated by local labour laws with weekends off. However, he was made to work round the clock with no weekends. The employer also opened two accounts in Maila’s name, one having salaries as per the contract to show the Finnish authorities. But he kept bank cards which he and his wife used for personal expenses. He deposited some money into Maila’s other account. Police used evidence from the two bank cards in their investigation, and presented it to the court.Maila says he learnt this was standard operating procedure in many Nepali restaurants in Finland. After a year-and-half, Maila filed a complaint, but first had to prepare to be ostracised by the Nepali community. He says he wanted to make his employers and other South Asians here accountable to their workers who were mostly not educated, not aware of their rights, or afraid to raise their voices against their employers.“As laws in Finland are very strict, we do not get involved in legal issues of Nepali workers here,” explains Basanta Gautam of the Non-resident Nepali (NRN) National Coordination Council of Finland, “however, we think there is a need of awareness to both employees and employers regarding employment rules and regulations in Finland.”As per Finnish law, since all five perpetrators admitted to their crimes and agreed to pay all financial obligations together with interest and taxes, they have been exempted from imprisonment, but will remain under probation.Another Nepali in Finland says many migrant workers have come to Finland on verbal agreement from a restaurant owner, but they are desperate to get a toe-hold in Europe. Employers think they are actually doing the workers a favour by bringing them over, and some restauranteurs say not all worker complaints are valid and they “play the victim card”.NRN CEO Hemant Dawadi says: “Safe Migration and respectable foreign employment concerns us, and we provide advice and counselling whenever approached.” He admitted that NRN had no figures for the number of Nepalis who work in establishments owned and managed by the diaspora. Although the organisation gets frequent complaints, Gautam says the NRN Associaton is not a policing authority.After the verdict, Maila has had to endure threatening messages from his former employers. “I was aware enough to know my rights, but most Nepalis who come here are not. I wanted to show fellow Nepalis that they have to be aware of the risks.”Some names have been changed.

Nepali restaurateurs fined in Finland

It was 30 years ago this month that investment into ‘Baby Arun’, the 201MW first phase of the run-of-river Arun III project, was brought to a screeching halt when the World Bank officially withdrew its support. This brought about profound and fundamental changes in the way Nepal’s power sector subsequently developed. Nepalis suffered debilitating power outages between 2008-2016 due to shortages attributable to the cancellation. At the same time, the gap left by Baby Arun was filled by private sector investment in ways that were not obvious in 1995. It took 30 years, but in many ways Nepal’s power sector is more healthy today than it has ever been, and likely better than if the project was built as planned. At a projected budget of $1.08 billion, Baby Arun would have cost the equivalent of Nepal’s entire annual government expenditure in 1995. It was to be funded by concessional grants and loans from multilateral and bilateral funders, including the World Bank, Asian Development Bank (ADB), KfW, and investment by the government itself. At the time, Nepal’s total electricity generation capacity was only 230MW, and the trajectory of the power sector changed dramatically following the cancellation. In the past 30 years, $5.4 billion has been invested in the power sector led by private investors, and much of it from domestic banks and pension funds (table, right).  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0.jpg" data-media-id="editor_0" data-image-id="20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0" data-rendition-name="original" width="984" height="521" loading="lazy" alt="30 years after Baby Arun"> </figure>  Nearly 70% of the new megawatts generated were by private independent power producers (IPP) in the past 30 years, while the Nepal Electricity Authority (NEA) and its subsidiary companies added 30% of new capacity. Almost 80% of total debt financing came from domestic banks and employee retirement funds. International assistance for power generation dropped dramatically over this time, accounting for only about 15% of investment. Before 1995 new power projects used to be entirely dependent on foreign aid. Since 1995, 63% of new generation came from 171 small hydropower projects with an average capacity of 12MW, while 4% was from 21 solar photovoltaic and biomass projects developed by local IPPs.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097.jpg" data-media-id="editor_1" data-image-id="20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097" data-rendition-name="original" width="988" height="503" loading="lazy" alt="30 years after Baby Arun"> </figure>  Over three decades, investment in Nepal’s power supply came primarily from new actors that had never before been involved in this sector. The rate of electrification rose from 10% to close to 100% -- sufficient to meet domestic needs during most of the year, and in 2024 made Nepal a net exporter of power to India for the first time in its history. As practically all the new investment in this period went into run-of-river hydro and solar projects, rather than into hydropower reservoirs with seasonal storage, Nepal continues to rely on imports from India during the dry winter months. Surplus electricity generation for export during the monsoon is slated to grow rapidly as another 200 solar and hydro projects are nearing completion of construction, with over 5,000MW of power capacity. Private Power The cancellation of Baby Arun inadvertently accelerated the entry of the private sector into Nepal’s power generation. The government enacted the Electricity Act in 1992 to attract private IPPs and diversify away from total dependence from international aid, but had been struggling for several years to conclude the first agreement with the 60MW Khimti Project. There remained a large gap between the tariff that the government thought was reasonable versus what was demanded by the Norwegian investor Statkraft, and the private sector arms of the World Bank and ADB that were financing the project. The shock of World Bank withdrawal from Baby Arun put tremendous pressure on the government, then led by the UML as it is now. The Bank’s decision to terminate its involvement was ostensibly, at least partially, taken in response to a letter critiquing the project sent by the UML while it was in the opposition.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347.jpg" data-media-id="editor_2" data-image-id="20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347" data-rendition-name="original" width="949" height="446" loading="lazy" alt="30 years after Baby Arun"> <figcaption>BAD NEWS: Newspaper clippings from the early 90s on tender announcement ahead of loan approval (left) and secrecy surrounding environmental assessment (centre) of Arun III before its eventual cancellation in August 1995.</figcaption> </figure>  The government was forced to soften its position and agree to the investors’ terms following the cancellation of Baby Arun. It directed NEA to sign a power purchase agreement (PPA) with Khimti. It was concluded in January 1996, and this was followed by a second PPA in July 1996 with Panda Energy, the American developer of the 45MW Upper Bhotekosi project. The expensive USD-denominated agreements to buy power from two international private producers, with price escalation clauses tied to the New York Consumer Price Index, sent alarm bells ringing. There was worry that the country was heading towards unaffordable tariff rates for the consumer and potential bankruptcy for NEA as a result of inevitable future weakening of the Nepali Rupee. The government had strong-armed NEA into signing these agreements, and realised that concessionary financing terms that Nepal was used to receiving for public sector projects such as Baby Arun and Kali Gandaki A, that included below-market interest rates and 40 years repayment period with a 10 year grace period before starting repayment, were not the norm for private sector investors. Nepal’s status as a less than attractive destination for foreign investment meant that the country had few options but to accept expensive dollar PPAs from international developers with the high commercial interest rates and short repayment periods imposed by their banks because of high investment risks. In the end, the government ended up having to additionally provide a sovereign guarantee in order to close the deal at the insistence of the lenders – committing it to repayment in case NEA defaulted on paying the IPPs. It is reasonable to assume that the extraordinarily high political cost of agreeing to the PPA terms would have meant that no government would have willingly agreed to them in 1995 had it not suffered the trauma of the loss of concessionary-financed public sector projects as large as the Baby Arun. It has taken NEA 25 years to consider offering dollar-denominated PPAs again: to cover the foreign exchange portion of the investment in the 216MW Upper Trisuli-1 and 120MW Rasuwa-Bhotekosi Hydropower projects. It seemed unlikely at the time, but it turned out that the dire situation Nepal found itself in 1995 planted the seed to mobilise investment for affordable power from within the country. Double Whammy After the dual shock of first losing investment in Baby Arun and having to sign expensive power purchase agreements with international IPPs, the first proposal for an alternative strategy to mitigate the risk of foreign currency investment into hydropower projects came from a group of engineers within the Arun III team at NEA. Led by <a href="https://archive.nepalitimes.com/news.php?id=4900">Deputy Director Damber Bahadur Nepali,</a> engineers convinced the leadership that NEA needed to invest in a subsidiary company to build a series of locally-designed and domestically-financed projects that would have lower cost with rupee-denominated PPAs. They registered the Chilime Hydropower Company Limited (CHCL) in October 1995 with 51% shares from NEA, 25% from its employees, and 24% available for the general public, 10% of which was prioritised for local residents at the project site. The 22.1MW project is in Rasuwa on a tributary of the Trisuli, and mobilised debt financing from the Employee Provident Fund, which manages retirement savings for employees of the government, public enterprises, and private sector institutions. CHCL’s experience showed that NEA employees themselves believed that individual hydropower projects with operational independence from NEA could be developed profitably in Nepal by its own engineers -- and they were willing to put their own money on the line. Chilime also demonstrated that there was money in the country, particularly with retirement funds, looking for opportunities for long-term investments. Following completion of Chilime in 2003, CHCL led the formation of three other NEA subsidiary companies that completed construction in 2023 and 2024, producing 168.3MW using fully rupee-tied investment. NEA’s largest subsidiary, the Upper Tamakosi Hydropower Limited, completed construction of its 456MW plant in 2021.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3.jpg" data-media-id="editor_4" data-image-id="20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3" data-rendition-name="original" width="3000" height="1571" loading="lazy" alt="30 Years after Baby Arun"> <figcaption>DAMNED: The $700 million 456MW Upper Tamakosi built entirely with domestic funds before it was destroyed by the September floods last year. </figcaption> </figure>  There were some delays and cost overruns on this run-of-river project, the largest in the country with a final cost of over $700 million -- all of it sourced domestically. The five subsidiary companies launched by NEA have produced almost two times as much new power as NEA has over the past 30 years. Seven other NEA subsidiaries are currently constructing projects to add another 474MW to the national grid. But even more important than NEA subsidiaries have been local IPPs: Nepali companies which have over the past three decades enthusiastically entered the hydropower sector. From a regulatory perspective, the credit for mobilising domestic private investment to engage in power generation goes to Minister of Water Resources Shailaja Acharya, who in 1998 offered a flat feed-in-tariff of Rs4/kWh for hydropower projects under 10MW. This upfront offer removed a major barrier that early developers had faced of having to spend money to carry out a detailed feasibility study before they could even start tariff negotiations with NEA. She had laid the foundation stone of the Chilime project, and proved to be the champion of opening up the sector for domestic IPPs. The guarantee of a PPA with a fixed tariff, irrespective of project specifications, gave small power developers the confidence to apply for survey licenses and invest in feasibility studies so they could directly approach commercial banks and make a case for their project producing required revenue to repay loans. Domestic IPPs started adding power to the national grid in 2002. Their contribution was initially modest, and first projects were small and commercial lenders who took time to be confident about providing debt financing to a sector which had previously not been considered suitable for private sector investment. While the first 10 years were slow, with less than 10MW being added to the grid each year, this increased twenty fold over the following ten years, resulting in the equivalent of a Baby Arun being added by Nepali IPPs to the grid each year. A total of 84 IPPs added 232MW, 328 MW, 454MW, and 400MW of new generation to the grid in 2021-2024 (graph). There was explosive, exponential growth as domestic developers have surged ahead to account for 76% of the new megawatts added to the grid since 2020, compared to 24% by NEA and its subsidiary companies. The megawatts that IPPs are adding have followed the classic ‘hockey stick curve’ with the ‘breakout point’, signaling the rapid growth phase in 2020. Private producers are expected to accelerate new generation in the coming years with 300 solar and hydropower projects adding 11,000MW. Another 166 hydropower and 96 solar projects are currently in the survey stage, and are in line to add another 11,000MW to the construction pipeline. One major challenge is finding financing required for the projects. Domestic investment will no longer be sufficient to finance this ambitious pipeline of renewable energy projects. Project developers as well as NEA and the Electricity Regulatory Commission will have to leverage their substantial experience accumulated through the construction of over 200 projects to attract regional and international investment and hedge the risks of dollar-denominated PPAs. Following the cancellation of Baby Arun, <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Nepal developed a highly distributed power sector</a>. The national electricity grid is currently supplied with power from a remarkably decentralised array of hundreds of hydropower and solar photovoltaic projects spread across 43 districts and all seven provinces.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b.jpg" data-media-id="editor_6" data-image-id="20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b" data-rendition-name="original" width="1228" height="867" loading="lazy" alt="30 years after Baby Arun"> </figure>  This presents a sharp contrast to the pathway of a few large public sector hydropower projects with a sprinkling of private sector projects that was envisioned as part of NEA’s investment planning when Baby Arun was being considered the front runner for investment. The strategy then was to allow public sector investment in a few large hydropower projects with thermal plants to fill the gap. Knowing what we know now about acceleration of climate change impacts and increased extreme weather events, following this path would have made Nepal’s power sector highly vulnerable. Decentralised generation greatly improves the resilience of Nepal’s power supply as damage to power plants in one part of the country need not affect other areas that have their own generation. Following the investment plan where over two thirds of the country’s power supply would have come from power plants on the Arun River, would have greatly imperiled Nepal’s energy security. All rivers in Nepal are susceptible to flooding from cloudbursts made more frequent by climate change. The Arun River which is fed by glaciers in Tibet is also at risk to glacial lake outburst floods. Bikash Pandey is Director of Clean Energy and Circular Economy at Winrock International. People Power is his regular column in Nepali Times on global energy issues relevant to Nepal. <h2>Decentralised and Diversified</h2> In the 30 years since the cancellation of ‘Baby Arun’: Hydropower projects constructed cover capacities ranging from less than 1MW to 456MW and developed by IPPs from across the country with strong local involvement in purchasing equity shares. Renewable energy sources contributed to the generation mix through solar IPPs that further contribute to climate resilience, and cover shortfalls during low rainfall. The government is committed to solar contributing 10% of the power on the grid. Increasing solar beyond this target and providing incentives to project developers to invest in utility-scale battery storage would further improve resilience. BIG ARUN: The 900MW Arun III project under construction since 2018 at Num in Sankhuwasabha (pictured, below) is a separate initiative by a different project developer using a different financing modality. The ‘Baby Arun’ version of Arun III was cancelled in 1995.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb.jpg" data-media-id="editor_7" data-image-id="20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb" data-rendition-name="original" width="1750" height="1312" loading="lazy" alt="30 Years after Baby Arun"> </figure>

30 years after Baby Arun

An average Nepali could live 3.3 years longer if air pollution is reduced to meet the World Health Organization (WHO) guideline, according the annual <a href="https://aqli.epic.uchicago.edu/">Air Quality Life Index</a> 2025 published this week. The annual average concentration of tiny suspended particles in the air (PM2.5) in Nepal in 2023 was 38.3 μg/m3, nearly eight times the WHO standard, and 10% higher than 2022. Thirty years ago, air pollution in Nepal was half the current levels. WHO says particulate concentration above 5μg/m3 &nbsp;is<a href="https://nepalitimes.com/here-now/what-is-invisible-is-more-dangerous"> hazardous to health</a>.&nbsp; The most <a href="https://nepalitimes.com/banner/why-is-the-air-in-bhaktapur-so-bad">polluted parts of Nepal</a> are along the Indian border in Rutahat, Mahottari, Dhanusha, Parsa and Bara districts in Madhes Povince where average life expectancy is reduced by as much as 5.3 years.&nbsp; People in Sarlahi, Siraha, Saptari, Morang, Sunsari, Rupandehi and Jhapa are also dying at least 4 years earlier. The Air Quality Index 2025 report which is published annually by the Energy Policy Institute at the University of Chicago, says the figure is relatively lower for Kathmandu and Lalitpur at 2.6 and 2.4 years. After the Madhes, Kosi and Lumbini Provinces are the most polluted — especially in towns along industrial corridors and near the border. Karnali Province was by far the cleanest, followed by Sudurpaschim. Read also: <a href="https://nepalitimes.com/here-now/epicentre-of-pollution">Epicentre of pollution</a>, Sonia Awale  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250828060856_136770cc84e114e8993af82e6a682c45d9458060e4ecf45f18e9f210673e1279.jpg" data-media-id="editor_4" data-image-id="20250828060856_136770cc84e114e8993af82e6a682c45d9458060e4ecf45f18e9f210673e1279" data-rendition-name="original" width="753" height="584" loading="lazy" alt="AQLI map"> <figcaption>Potential gain in life expectancy from permanently reducing PM2.5 from 2023 concentration to the WHO guideline.</figcaption> </figure>  Air pollution is now the leading external<a href="https://nepalitimes.com/editorial/cleaner-air-longer-lives-0z0okfeu"> threat to life expectancy in Nepal</a>, exceeding both tobacco and diet-related risks, which reduced average lifespans of Nepalis by 1.9 years and 1.3 years respectively. The Air Quality Management Action Plan for Kathmandu Valley introduced in 2017 had identified vehicular emissions, brick kilns, and construction as the most polluting. It adopted measures to strengthen air quality monitoring, develop emissions inventory, and conduct impact assessments. Other major sources of emissions in Nepal include <a href="https://nepalitimes.com/news/no-smoke-without-fire-p7vb9dcj">forest fires</a>, crop residue and garbage burning as well as transboundary pollution from India and Pakistan. The report says India is the world’s most polluted country with the particulate concentration in 2023 at 41 μg/m3, an average resident in India could live 3.5 years longer if pollution levels were brought down to meet the WHO guideline. Residents of New Delhi on average would live 8.2 years longer if they breathed clean air. South Asia has some of the world’s most polluted cities. On some winter days, Kathmandu records the worst air quality in the world. In 2023, PM2.5 concentrations in South Asia declined by 9.6% between 2021 and 2022 due to lockdowns during the peak of the Covid-19 pandemic. ‘After a dip in 2022, particulate pollution in South Asia increased by 2.8% in 2023 — though it remained 7% lower than in 2021,’ <a href="https://aqli.epic.uchicago.edu/report/annual-update-2025">states the report</a>. ‘In the region’s most polluted countries, particulate pollution’s impact on life expectancy is nearly twice that of childhood, and maternal malnutrition and more than five times that of unsafe water, sanitation and handwashing.’ Elsewhere, unprecedented wildfires caused particulate concentrations to rise to levels not seen since 2011 in the United States and since 1998 in Canada. China also registered a decline in air quality, an increase of 2.8% in particulate pollution in 2023 relative to 2022, the first in a decade since the start of its ‘War on Pollution’ in 2014.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250828060856_94860b929d0fb161220ad72ecb76fcd29ba8e306bd6b844485a4171dadb6bb47.jpg" data-media-id="editor_8" data-image-id="20250828060856_94860b929d0fb161220ad72ecb76fcd29ba8e306bd6b844485a4171dadb6bb47" data-rendition-name="original" width="754" height="501" loading="lazy" alt="AQLI line graph"> <figcaption>Annual average PM2.5 concentration in Nepal from 1998-2023.</figcaption> </figure>  Globally, the PM2.5 concentration in 2023 was 1.5% higher than in 2022, and nearly 5 times the WHO guideline. If global particulate pollution were permanently reduced to meet this guideline, an average person around the world would gain 1.9 years of life, adding 15.1 billion total life years to the <a href="https://nepalitimes.com/opinion/the-future-is-older">global population</a>, the report adds. ‘Particulate pollution remained the greatest external threat to human life expectancy in 2023, with <a href="https://nepalitimes.com/here-now/air-pollution-is-more-dangerous-than-smoking">its impact comparable to smoking</a> and surpassing other major health risks,’ the report says. ‘Its toll on life expectancy is more than 4 times that of alcohol use, 5 times that of transport injuries or unsafe water, sanitation, and handwashing, and more than 6 times that of HIV/AIDS.’ The report also highlights the need for open data, and says that accessible air quality information has translated into reduced particulate concentrations and gains in life expectancy in the United States, China, and Poland. Besides data, the report says, investment in monitoring and other air quality management infrastructure must be matched by political will, ambitious policies, capacity building, and sustained enforcement.

Warning: breathing is hazardous to health

It cannot be a coincidence that after pushing bills to constrict freedom of expression and allow greater <a href="https://nepalitimes.com/news/security-or-espionage">surveillance of citizens</a>, Nepal’s government is now tightening controls on civil society.
In a <a href="https://nepalitimes.com/opinion/guest-editorial/command-and-control">series of recent moves</a> journalists have been sued for contempt of court, imprisoned for YouTube videos, or ordered by courts to desist from investigating corrupt officials.
An amendment to the Print and Publications Act that would hand the power to shut online media to the Chief District Officer (CDO). Another draft Bill would allow a political appointee to head a new Media Council with the power to revoke a journalist’s license. The draft counter-intelligence Bill would let random officials to arbitrarily tap phones, read emails and trail citizens.
Now comes yet another draft Bill that would replace the <a href="https://archive.nepalitimes.com/news.php?id=10675">Social Welfare Council (SWC)</a> with direct government control over registration, regulation, and management of non-governmental organisations, nonprofits and charities. There are more than 54,000 NGOs, 200 international NGOs registered with the SWC.
The draft makes civil society organisations needlessly jump through hoops to carry out work that complements the government in the social sector. Critics say the Bill was drafted without any consultation with <a href="https://nepalitimes.com/opinion/comment/nepal-s-rights-groups-must-step-up-4r4z6ck4">civic groups</a>.
“This Bill’s content is questionable whether it intends to allow for civil society organisations in Nepal a free space to operate,” concludes Dr SP Kalaunee, Country Representative of BlinkNow Foundation and Chair of the Association of International NGOs in Nepal (AIN). “The draft seems oriented towards controling rather than facilitating the work of civil society organisations.”
The Bill will be open for feedback from the public, and integrates the National Directives Act (1961), Association Registration Act (1977), and the Social Welfare Act (1992) and proposes dissolving the SWC and replacing it with a new Social Welfare Department under the Ministry of Women, Children and Senior Citizens.
Non-government groups will now be required to get approval from the Registrar Office, the CDO or the provincial government depending on their area of operation. Those working across provinces will have to get permission from the federal government. &nbsp;
The government says the Bill is intended to vet organisations to see if they are engaged in espionage, violate national security, assist a foreign state, commit treason, cause strife between federal units, or incite communal violence.&nbsp;
CSOs working in Nepal have long called for legislation to better facilitate their work, minimise administrative and bureaucratic red tape which have posed operational challenges. But they are opposed to such drastic control.&nbsp;
Read also: <a href="https://nepalitimes.com/banner/the-crow-and-the-scarecrow">The crow and the scarecrow</a>, Om Astha Rai
The NGO Federation of Nepal also issued a statement this week calling the Bill ‘retrograde and cumbersome’. It added: ‘Most of its provisions are intended to further constrain and control civil society organisations rather than facilitate and strengthen them, and reduce the role of citizen participation … it is an attack on our civil liberties, inclusivity, and transparency, and curtails our <a href="https://archive.nepalitimes.com/news.php?id=5156">democratic values and constitutional rights</a>.’ &nbsp;
<a href="about:blank">Nepal’s graduation</a> from least-developed country status next year may mean less aid for Nepal, and higher interest rates on loans from multilateral creditors. The <a href="https://nepalitimes.com/news/how-usaid-cut-affects-nepal">closure of USAID </a>and reduction in bilateral grants means the work of INGOs will be even more vital – especially to meet its <a href="https://nepalitimes.com/here-now/target-2030-for-maternal-and-newborn-health">SDG targets by 2030</a>.&nbsp;
“We are competing with other countries at a time when the global aid environment is shrinking, so the support we receive is directly dependent on a conducive environment for INGOs to operate and function,” says Kalaunee. “INGOs follow regulations of the nations they operate in, they will not protest or wait around for governments to change their minds or policies.”
Social safety net
Since 1977, the work of non-governmental actors in Nepal has been regulated by the Social Service National Coordination Council (SSNCC) chaired by Queen Aishwarya.
After the <a href="https://nepalitimes.com/banner/one-moment-30-years-ago-today">1990 People’s Movement</a>, King Birendra set up the Social Welfare Council (SWC) as an autonomous body in 1992 through the Social Welfare Act. But since then the SWC has been dogged by controversy and allegations of corruption and extortion.
In 2018, the Commission for the Investigation of Abuse of Authority (CIAA) filed a Rs315 million corruption case against 14 individuals, including the Minister of Women, Children and Social Welfare and SWC chair Badri Prasad Neupane and other officials for violating public procurement laws to rent out three hectares of its property around Bhrikuti Mandap.
Civil society groups have for years called for reforms in the SWC, and a report was drawn up to restructure it before this Bill proposed its dissolution. INGOs in particular will now have to go through the Social Welfare Department and multiple ministries for permissions.
A particularly objectionable provision in the draft stipulates that NGOs must have a Board of Director made up almost entirely of secretaries of various ministries. The NGO Federation has urged the government to take a civil society-friendly approach and not tangle its work in red tape and control. It says the government has no option but to revise the bill in its current form.
“Civil society organisations need an open space to operate, and an autonomous body to oversee them,” says Kalaunee. “Non-government organisations support in the areas prioritised by the government but by definition they cannot be a part of government.”

Big, beautiful Bills

A cosy art space in Thamel comes alive this month with soft light filtering through glass windows and settling gently on ceramic works that radiate both silence and strength. Much like specks of dust shimmering in a sunbeam, fragments of uneven mirrors scattered at the centre of the exhibition catch fleeting reflections of passersby that force visitors to reflect on <a href="https://nepalitimes.com/review/the-fabric-of-society">life and society</a>. From a distance, the mirrors resemble playful, anime-style sunny side ups in bright shades. It may look random, but on closer inspection the <a href="https://nepalitimes.com/multimedia/hari-the-potter">meticulous craftsmanship</a> reveals itself in every curve, giving more permanent shape and form to the artist’s fingers on the original clay. Alongside are cups, vases, and plates adorned with <a href="https://nepalitimes.com/review/facades-and-flowers-from-nepal-to-italy">delicate sketches</a> of animals, houses, and trees. Some have inscriptions drifting across surfaces like floating letters. The vases rise in varying heights, dressed in muted greens, while some are blended with soft browns and yellows.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025082711084_3ccb0e0e002bee9521867cbca82d56a1dc1e3ed799c5159fc07adc6f674325ab.jpg" data-media-id="editor_3" data-image-id="2025082711084_3ccb0e0e002bee9521867cbca82d56a1dc1e3ed799c5159fc07adc6f674325ab" data-rendition-name="original" width="1080" height="810" loading="lazy" alt="Firing her imagination"> <figcaption>Photo: DALAI-LA ART SPACE</figcaption> </figure>  “Ceramics have taught me patience in unpredictability,” says ceramic artist Aishworya Shakya, 26, whose work is currently on display at Dalai-la gallery in Thamel. Shakya began with simple drawings, but as she delved deeper into her studies of fine arts, she began exploring new concepts and methods of idea formation. She found herself increasingly drawn to <a href="https://nepalitimes.com/banner/take-to-pottery-during-the-pandemic">the expressive potential of ceramics</a>. “Clay is flexible and transformative, and the process of turning it into a hardened form is cathartic,” she explains. “For me, it’s about free forms, feelings, and the intangible, which often take shape in <a href="https://nepalitimes.com/multimedia/kiran-manandhar-in-the-abstract">abstract ways </a>through ceramics.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250827100812_4e2efcf1284d6589d5eafb34b276b8d4c69ebba9453efe4af9a70c51b2e31d6f.jpg" data-media-id="editor_6" data-image-id="20250827100812_4e2efcf1284d6589d5eafb34b276b8d4c69ebba9453efe4af9a70c51b2e31d6f" data-rendition-name="original" width="739" height="985" loading="lazy" alt="Firing her imagination"> <figcaption>Photo: DALAI-LA ART SPACE</figcaption> </figure>  The writings on her finished ceramics are deeply rooted in her academic explorations of personal history. Shakya contemplated family relationships, and transformed them into patterns and inscriptions on clay — giving her private meditations an extension on <a href="https://nepalitimes.com/review/an-ode-to-the-ordinary">life and lessons</a>. “It is never fixed what I want to make when I begin,” says Shakya. “There might be a frame, but never anything too specific. My forms come through an intuitive process. If I try to meticulously plan everything, it never works out, so I just let it flow.” What begins as an imagined idea often transforms through the process, shaped by the unpredictability of clay and fire, keeping her grounded and open-minded. Shakya’s works usually undergo three rounds in the furnace: beginning with bisque firing, followed by layers of engobe underglaze mixed with pigments, which she applies in three coats before the second firing. Finally, she adds the glaze before the final firing. The most demanding part is actually in <a href="https://archive.nepalitimes.com/news.php?id=13617">preparing and mixing the clay</a>, removing bubbles, and refining it so the final product has at least some predictability, she says.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025082711080_d4856f6f195e9b2ad06144832121da0068aaf0f94800c483b278a204fbf3865e.jpg" data-media-id="editor_9" data-image-id="2025082711080_d4856f6f195e9b2ad06144832121da0068aaf0f94800c483b278a204fbf3865e" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="Firing her imagination"> </figure>  The title Burned and Being comes from the ceramic-making process itself. “But more than just the process, it is an embodiment of my existence. As a person learning to take up space, I am filling my surroundings with things that inspire and align with me to create a sense of being and take a stand for myself,” Shakya explains. The artist is now looking ahead to expand her art beyond vases and mirrors to explore more sculptural forms. Burned and Being Till 30 September 11am to 7pm Dalai-la Art Space, Thamel