· &nbsp;At least 400 people are dead or missing after heavy rainfall lashed arid regions of northwestern Pakistan. Walls of mud and boulders engulfed entire villages in Khyber Pakhtunkhwa Province. More than 700 people have been killed in floods in Pakistan since June.&nbsp; · &nbsp;Over in India’s Jammu and Kashmir at the same time, multiple slurry floods on 17-18 August killed more than 80 people · A mudslide possibly caused by a glacial collapse upstream in Uttarakhand on 5 August nearly wiped the village of Dharali off the map. At least 70 people, 23 of them Nepalis are dead or missing. · On the night of 8 July, <a href="https://nepalitimes.com/news/rasuwa-flood-likely-a-glof">glacial lakes in Tibet overflowed</a>. By dawn the mudflow had demolished the Nepal-China border bridge killing at least 11 people, destroyed hydropower plants, swept away bridges, roads, over 100 cargo trucks and newly imported electric vehicles. All these disasters have a common thread: a cascade of hazards caused by record-breaking rainfall on fragile Himalayan slopes destabilised by melting glaciers and permafrost, seismicity and poorly engineered infrastructure. They are called ‘rain bombs’ — a heavy localised downpour measuring more than 100mm/h on a steep mountainside. As global warming heats the atmosphere, warmer air can hold more water vapour. The heavy rain then falls where there should be snowfall: on moraines and slopes that have lost the permafrost adhesive that held the debris together. “Increasingly, there is now more rainfall at higher altitudes where there used to be snowfall previously, and this directly impacts loose material in that fragile landscape which moves down,” explains Mohan B Chand, a Himalayan Glaciologist at Kathmandu University. “Moreover, the rains these days are heavy and fall within a few hours. So even a small burst has bigger impact.” The <a href="https://nepalitimes.com/banner/drones-to-the-rescue-in-melamchi">2021 Melamchi flood</a> and the <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">Sikkim disaster in 2023</a> have been attributed to record-breaking torrential rain on a glacial moraine that collapsed, unleashing a catastrophic debris flow.&nbsp; The Bhote Kosi flood this year happened even without torrential rain, and originated at rapidly expanding supraglacial lakes that overflowed, similar to what happened on the Mendenhall Galcier in Alaska last week. In Uttarakhand, the trigger could be in the upper catchment cryosphere, or a landslide dammed lake. Basanta Raj Adhikari of the Centre for Disaster Studies at the Institute of Engineering also calls them ‘sediment bombs’. He clarifies: “There is lots of sediment up there from landslides or glacial activity, and when there is heavy rainfall and hotter temperature, they are unleashed downstream. One thing is for sure, these extreme events are getting more frequent and more destructive.” Researcher Alton C Byers who has studied melting glaciers in the Himalaya and Andes names the eight most potentially dangerous glacial lakes in Nepal: Lower Barun, Chamlang North Tso, Chamlang South Tso, Dig Tso which burst in 1984, Lumding Tso, Thulagi, Tso Rolpa and Imja Tso (see map).  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250822030844_70b3bf6a1ad9b9f9481c9af860629b2a05ac1338a3b89a831506f1c6bdddf5ec.jpg" data-media-id="editor_3" data-image-id="20250822030844_70b3bf6a1ad9b9f9481c9af860629b2a05ac1338a3b89a831506f1c6bdddf5ec" data-rendition-name="original" width="522" height="557" loading="lazy" alt="high risk glacial lakes in Nepal"> </figure>  Of these, Tso Rolpa and Imja have been lowered by 3m each, while Thulagi, Lower Barun, Lumding Tsho, and Hongu 2 glacial lakes have been targeted for lowering by the Department of Hydrology and Meteorology as part of the recent Green Climate Fund grant of <a href="https://nepalitimes.com/here-now/meltpools-in-the-himalaya" target="_blank">$36.1 million awarded to Nepal</a>. “These lakes have changed over the years as their debris-covered glaciers continue to recede,” Byers told Nepali Times. “When water volume in the lake basin increases, they become more vulnerable to flood triggers such as overhanging ice as glaciers recede further to their headwalls, and permafrost on their moraines continues to melt.” <h2>These are not ‘natural disasters’</h2> Scientists have given the current planetary epoch a name: the Anthropocene. And anthropogenic causes in this era heighten the risk of disasters. Indeed, an analysis of recent Himalayan calamities (page 1) shows that there is much more at play here than climate breakdown. Haphazard encroachment of floodplains, quarrying and crusher activity exacerbated the effect of <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">extreme rainfall on 28 September around Kathmandu Valley</a> that killed 200 people. The human cost of the 5 August catastrophe in Uttarakhand would have been high in any case, but the fact that the tiny village had expanded across a vulnerable alluvial fan to cater to a tourism boom meant more death and destruction. There are similar alluvial fans across Nepal, where small towns have expanded because new highways follow rivers, like Beni located at the confluence of the Myagdi Khola and Kali Gandaki. Other towns like Kagbeni or Damauli are located on the banks of rivers and tributaries that are directly downstream from rapidly expanding glacial lakes or unstable mountains. “In Butwal, people are building houses on the floodplain of the Tinau River, and yet people blame climate change or rainfall when there is a disaster,” says Basanta Raj Adhikari at the Institute of Engineering. “This is happening all over the country. Imagine the kind of devastation Beni would suffer if there was a big flood.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250822030848_ed411f8618c7a411ed4c165e91f3b880abb085a8a511405710dd8220f657da84.jpg" data-media-id="editor_6" data-image-id="20250822030848_ed411f8618c7a411ed4c165e91f3b880abb085a8a511405710dd8220f657da84" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="Beni Bazar"> <figcaption>RISKY CONFLUENCE: Beni has expanded rapidly after the highway to Mustang was built. But the town is situated on the alluvial fan of past flash floods on both the Kali Gandaki and Myagdi Khola which have dangerous glacial lakes in their upper catchment. Photo: BENI TOURISM</figcaption> </figure>  Traditionally, Nepal’s villages and settlements were located high above rivers because our forebears learnt lessons from recurring flash floods. Now, the road network follows rivers, and towns have sprung up along these highways. Even when roads are not on river banks, many gouge out slopes above, unleashing massive landslides that block rivers. Experts say Nepal’s hazard map should now be updated for glacial outbursts so municipalities can plan risk-sensitive land use zoning. This &nbsp;must go hand-in-hand with measures to reduce the risk by structural mitigation, such as engineering and construction, and then with risk awareness and early-warning systems. Says Himalayan researcher Alton C Byers: “Sooner or later, communities will realise that certain sites are simply no longer safe for a village or city, especially because of climate change in the mountains. The Himalaya has always been high-risk with its steep slopes, thin soil, monsoon rainfall regime, and frequent seismic activity. So, some places are no longer safe to live in.” Mohan B Chand of Kathmandu University adds that <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">hazard mapping is especially crucial for expensive hydropower plants</a>: “Most of these are on snow-fed rivers, but environmental risk assessment is not taken seriously.” He says that because Nepal is set to generate 28,500MW by 2035 to meet its carbon neutral target, the government must work to minimise upstream risk by integrating disaster mitigation components in new energy investments. Few know that Nepal’s first hazard mapping was done 40 years ago in the Khumbu with a United Nations University study titled ‘Highland Lowland Interactive Systems’. It is hard to find that document anywhere. Today, hazard mapping technologies, satellite remote sensing, drones, synthetic aperture radar (SAR) and modelling with AI have made it much easier to integrate multi-hazard risk assessment. That data needs to be made available to local governments so they can plan. Cell phones and new apps that monitor real-time glacial lake levels, live precipitation and hydrological data, and local weather forecasts can make early warning systems more effective. Recent disasters have shown that even the smallest of glacial lakes that are rarely considered in risk assessments can cause much damage. Langmale Lake in the Barun Valley was less than 0.1 km2 in size, but <a href="https://nepalitimes.com/here-now/nepal-s-mountains-are-melting" target="_blank">the flood in 2017</a> caused extensive downstream damage. The 2012 Seti flood in Pokhara, the Chamoli disaster in Uttarakhand in 2021, the South Lhonak proglacial lake burst in Sikkim in 2023 that washed away the $1.7 billion Chungthang Teesta III Project, and the August 2024 floods above Thame in Khumbu are other recent examples.&nbsp; Byers thinks some of these floods may have been initially triggered by massive rockfall or moraine collapse related to <a href="https://nepalitimes.com/multimedia/the-not-so-permanent-frost" target="_blank">melting permafrost</a>. The size of a glacial lake alone does not determine the severity of destruction. What makes all the difference is downstream development, and if there pre-warning. Dig Tso in Khumbu which burst in 1984, was much larger than the lake that caused the Bhote Kosi flood in July, but the economic cost to the country of the trans-boundary disaster this year was much higher. Says glaciologist Chand: “We have to monitor the lakes, not just via remote sensing but with field visits. These may be costly, but mitigating the risk is less expensive than the disasters themselves.” Nepal has the technology and trained personnel to do hazard mapping, monitoring, and to design early warning apps. That data and information now needs to be available to all three levels of government to improve preparedness and risk reduction. “The cascading and compounding hazards are increasing in the Himalaya, this must be the subject of our research now,” says Adhikari at the Centre for Disaster Studies. “Recent events are a wake-up call, if we do not take this seriously things may be more dangerous in future.”

Sonia Awale

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Rain bombs

· On the night of 15 May, two glacial lakes burst in Tharka in Humla and the debris flow washed away homes and bridges.&nbsp; · Last week, a slurry surge on the Kali Gandaki in Upper Mustang caused at least Rs15 million in damage, and was traced to a melting glacier. · Dozens are feared dead after <a href="https://nepalitimes.com/news/rasuwa-flood-likely-a-glof">an expanding glacial lake in Tibet overflowed</a>, sweeping down into Nepal and damaging four hydropower plants generating 230MW, nearly 8% of the country’s total grid supply.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060748_45225dc707c1e9c2968ca8dbf6e564e01e4eb6e2ff254fb8eb940cf62cdd910b.jpg" data-media-id="editor_1" data-image-id="20250718060748_45225dc707c1e9c2968ca8dbf6e564e01e4eb6e2ff254fb8eb940cf62cdd910b" data-rendition-name="original" width="2667" height="1500" loading="lazy" alt="Rasuwa flood"> <figcaption>Miteri friendship bridge connecting Nepal and China was swept away in the Rasuwa flood. Photo: PRAKASH CHANDRA TIMILSENA / NPL</figcaption> </figure>  And those are just in the past month. Climate scientists say Himalayan glacial lake outbursts are becoming more frequent and destructive, and a warning for Nepal not to put all its eggs in the hydropower basket.&nbsp; <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">Record precipitation last September</a> unleashed floods that killed 200 people, and temporarily slashed Nepal’s total generation capacity of 3,000MW by nearly half. The <a href="https://nepalitimes.com/banner/nepal-valley-suffers-quadruple-disaster">Melamchi flood of 2021</a> caused by <a href="https://nepalitimes.com/multimedia/the-not-so-permanent-frost">permafrost melting</a> on a glacier upstream nearly destroyed a $800 million water supply scheme, Nepal’s largest infrastructure project which four years later still has not resumed full operation. The <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">glacial lake overflow in Sikkim</a> caused by record rainfall in September 2023 that destroyed the $1.2 billion Chungthung Dam and caused catastrophic damage to infrastructure on the Teesta River. This was a warning to the cascade of hydropower plants on the Arun and Marsyangdi river basins.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060736_6f61797a6be308321e3bae26e55d2f64cba4b9e5eb262adacb9e92fb5f3c6152.jpg" data-media-id="editor_6" data-image-id="20250718060736_6f61797a6be308321e3bae26e55d2f64cba4b9e5eb262adacb9e92fb5f3c6152" data-rendition-name="original" width="919" height="549" loading="lazy" alt="hydro disasters and hydropower plants"> </figure>  Nepal has set a target of generating an additional 28,500MW by 2035 -- out of the feasible 48,000MW -- but how viable is an energy strategy that is exposed to heightened risk due to climate breakdown? &nbsp; “As extreme weather events increase, we must design and build infrastructures respecting river flow and topography,” says former Energy Secretary Dwarika Nath Dhungel. “We must make the best use of our water resources, but not by letting excavators loose everywhere mining riverbeds and building haphazardly where we shouldn’t.”&nbsp; Although no project can be disaster-proof, <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">climate smart design</a> can minimise damage from flash floods and landslides. Recent disasters have driven up insurance premiums for energy projects in Nepal, and smaller ones cannot even afford them. The 456MW Upper Tamakosi hydroelectric project which is still not fully functional after the September floods has claimed insurance worth Rs1.8 billion. The alternative to high risk high investment hydropower projects is <a href="https://nepalitimes.com/here-now/what-s-cooking-in-nepal-besides-politics">energy diversification</a> to other renewables such as solar, wind or biogas. Nepal gets annual sunlight of 300 days with 6-7 hours on average to total 50,000 terawatt-hours (TWh) per year.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060744_4acd452b4117180ca9bb5d3be839ff46dfd5464e4d507f5ad3704cef6253bc48.jpg" data-media-id="editor_9" data-image-id="20250718060744_4acd452b4117180ca9bb5d3be839ff46dfd5464e4d507f5ad3704cef6253bc48" data-rendition-name="original" width="1080" height="720" loading="lazy" alt="solar power"> <figcaption>Farmers in Tarai using solar powered water pump. Photo: GHAMPOWER</figcaption> </figure>  The Solar and Wind Energy Resource Assessment (SWERA) calculates that Nepal could source 3,000MW from wind energy alone, considering 10% of the area with more than 300W/m2 wind power density. <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Solar energy</a> stations are cheaper and quicker to build, and would be an ideal alternative to reliance on hydropower.&nbsp; “There has been some investment in solar power, especially from the state sector,” says water expert Madhukar Upadhyay. “But there is an issue of land acquisition since the arrays need a lot of space. It is comparatively easier to get a permit to put up a hydropower plant on a river.” As for biogas, there is simply no incentive to build on past success with household level plants to <a href="https://nepalitimes.com/here-now/more-bullshit">promote industrial-scale production</a>. Scaling up biogas by integrating it with urban biodegradable waste would still be a viable alternative to LPG.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060744_715d44afd5eb4ba8dafa209b0ad0f19400665797b5f078f5636821e600f96684.jpg" data-media-id="editor_12" data-image-id="20250718060744_715d44afd5eb4ba8dafa209b0ad0f19400665797b5f078f5636821e600f96684" data-rendition-name="original" width="1419" height="954" loading="lazy" alt="windmill"> <figcaption>A wind mill in Hapsikot in Nawalpur. Photo: WINPOWER NEPAL</figcaption> </figure>  Nepal’s public sphere is buzzing with excitement over the discovery of potentially 430 billion cubic metres of methane gas beneath Dailekh district that, if properly harnessed, would meet the country’s energy demand for the next 50 years. Even though a feasibility study is awaited, politicians from the prime minister down see this as a petro bonanza that will make Nepal rich. But drilling, storage and distribution of CNG in the country’s current kleptocratic state make that unlikely. If Nepal was to get rich solely on its hydro-energy potential, it could have done so in the past 50 years. Says Dhungel: “This is not exactly a new discovery, but it is premature to celebrate until its extraction is proven to be cost effective. And let us hope it does not get <a href="https://nepalitimes.com/news/balance-of-power">tangled in geopolitics</a>, since China is involved in the prospecting and drilling, which could make India uneasy.”&nbsp; The country suffers from the Dutch Disease curse even before its resource is fully exploited. And the same cronyism, corruption and rent-seeking structure cannot deliver the riches we expect from Dailekh’s methane discovery. Now, <a href="https://nepalitimes.com/here-now/right-climate-for-nepal-s-energy-transition">with hydropower in jeopardy</a>, Nepal’s planners will have to evolve a new strategy for energy security into the future. But first, governance needs to be cleaned up with long-term strategic planning that takes climate risk into account. For example, do we need to mine fossil gas when there are renewable options? Will Dailekh take Nepal away from its climate commitments? Says Madhukar Upadhyay: “Nepal has always been resource rich and management poor. And the larger the resource, the bigger our management incapacity. It is a societal malaise.”&nbsp;

Nepal’s Resource Curse

Thirty years after it abruptly pulled out of the Arun III project, the World Bank appears to have developed cold feet about an even larger project on the river in eastern Nepal. After opposition by civil society in Nepal, Japan and Europe, the Bank’s new president James Wolfensohn <a href="https://nepalitimes.com/20-years-ago-this-week/arun-iii">exited from Arun III</a>. The project’s generation capacity has been doubled to 900MW and it is being development by India’s state-owned SJVN Limited.&nbsp; Whereas in 1995, the opposition to Arun III was mainly from activists, this time it is said to be India’s displeasure with the Bank’s involvement in the <a href="https://nepalitimes.com/news/world-bank-flip-flop-on-upper-arun">1,061MW Upper Arun</a>. Delhi is so sensitive to the issue that sources said it even leaned on Indian-born American President of the World Bank, Ajaya Banga to cancel his trip to Kathmandu for the IDA21 Replenishment Meeting in June. When it gets the green light, Upper Arun will be the most expensive hydroelectric project in Nepal so far with a price tag of $1.6 billion. The semi-storage scheme is located on the transboundary Arun River 15km from the Chinese border after it cuts through the Himalaya between Mt Everest and Kangchenjunga. Beijing is said to have no objections to the project, but India’s silence is said to stem <a href="https://nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">from its strategic interest</a> in not allowing anyone else to build large storage projects on the tributaries of the Ganga in Nepal. India’s SJVN is also currently constructing three large projects downstream, including Arun III and Lower Arun with a total generation capacity of nearly 2,000MW.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241220111240_f6e0fda98407360d7a4456e861481ad811f7a75ce5ab7605158e980615f3fb16.jpg" data-media-id="editor_3" data-image-id="20241220111240_f6e0fda98407360d7a4456e861481ad811f7a75ce5ab7605158e980615f3fb16" data-rendition-name="original" width="850" height="771" loading="lazy" alt="Upper Arun Map NT"> </figure>  Nepal Electricity Authority (NEA) set up Upper Arun Hydro-electric Limited (UAHEL) as a subsidiary and in May signed up the French firm Tractebel for detailed design of the scheme. Experts say the design will have to take into account future climate-induced glacial lake outbursts like the one that swept away the 1,600MW <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">Chungthang Teesta</a> III in Sikkim last year built at a cost of $1.7 billion.&nbsp; Upper Arun’s financing will be 70% loans and 30% equity. The World Bank had already earmarked $750 million with the Asian Development Bank (ADB) with Japan’s JICA also joining. But UAHEL Managing Director Fanendra Raj Joshi said there was no word either way from the World Bank, which meant there was no financial closure yet. Read also: <a href="https://nepalitimes.com/here-now/right-climate-for-nepal-s-energy-transition">Right climate for Nepal’s energy transition</a>, Ramesh Kumar All this is in stark contrast to the optimism last year after Finance Minister Prakash Mahat returned from an IMF meeting in Morrocco and announced that the World Bank would be the main lender in Upper Arun.&nbsp; In November 2024, Mahat even took a helicopter with World Bank Managing Director Anna Bjerde and ADB Director Ramesh Subramaniam to the Upper Arun site and it looked like the loans were in the bag. It would also be the first large project in Nepal in which both big multilateral lenders would be involved.&nbsp; In April this year, an ‘agreement in principle’ was even reached between Mahat’s successor Barsaman Pun and World Bank Vice President for South Asia Martin Raiser to develop Upper Arun. But the loan meeting planned for June was cancelled. &nbsp; A Finance Ministry official told Nepali Times: “The World Bank told us categorically in November in Washington DC that India was opposed to its involvement in Upper Arun.” &nbsp; When Prime Minister Pushpa Kamal Dahal visited Delhi in June, Indian officials reportedly said they were interested in developing Upper Arun and evacuate its power through an extension of the 400kV transmission line it is building. Although Beijing had given the go ahead to the World Bank and ADB involvement in Upper Arun, it may not be as happy about an Indian company so close to its border. As a semi-reservoir project, Upper Arun can generate electricity at full capacity for up to six hours a day even in winter, unlike the schemes downstream which are run-of-the river in which generation depends on water flow.&nbsp; Read also: <a href="https://nepalitimes.com/multimedia/rivers-be-dammed">Rivers be dammed</a>, Pinki Siris Rana&nbsp; India is involved in projects in Nepal’s rivers that will generate a total of 8,000MW when complete. SJVN Limited is also taking over from the Chinese the 769MW Tamor project in the Arun Basin. &nbsp; Says Fanendra Raj Joshi of Upper Arun Hydro-electric Limited: “Nepal can find alternative sources of funding and we will go ahead with this project even if the World Bank decides not to provide the loan.”&nbsp; Joshi and the NEA’s Kulman Ghising (pictured, below) attended a hearing with indigenous communities at the project site in Sankhuwasabha this week. Ghising told the gathering that if the World Bank pulled out Nepal would carry on with Upper Arun through “domestic and diaspora investment with the same financial package as Upper Tama Kosi”. The 546MW <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">Upper Tama Kosi was knocked</a> by a massive landslide in September and will not be fully operation at least for a year. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241218091240_bfaaadc83881c7551d1dd501447b7a22c10b89104aeea3cab58a100444b016d5.jpg" data-media-id="editor_8" data-image-id="20241218091240_bfaaadc83881c7551d1dd501447b7a22c10b89104aeea3cab58a100444b016d5" data-rendition-name="original" width="800" height="600" loading="lazy" alt="Kulman Ghising"> </figure>  “This is a project that can transform the local economy and Nepal’s economy as well,” Ghising added. “We will go ahead with blended financing from all levels of government.” Despite the lack of financial closure, construction of the project is expected to get underway in 2026 for completion in six years. Construction of a 21km access road from the power house to the dam site along the Kosi Corridor highway is in full swing through difficult terrain.

Upper Arun question mark

What’s cooking in Nepal besides politics?

In December, forecasters predicted that Nepal would receive more rain than the three decade average rainfall this winter. We are halfway through winter, and many parts of the country have not received a single drop of rain for four months. Terrace fields in the mountains are dry, and in the plains winter wheat is drying up. Many Himalayan mountains are naked and snowless.&nbsp; “Mukut Himal and many mountains are just bare rock when they should be white with new snow this time of year,” says Madan Sigdel of Tribhuvan University who returned from Upper Dolpo district last week. Nepal receives an average of 60mm of rain during the three coldest months. However, the Department of Hydrology and Meteorology has recorded just 1.9mm of rain so far this winter. So far, at least, the forecasters have been dead wrong. The 2023-24 winter is turning out to be driest in recent years.&nbsp; Bibhuti Pokharel of the Department of Hydrology and Meteorology says that it is too early to declare his office’s weather models wrong. He adds, “Ours was a long-term forecast, it may not have rained yet, but it might rain more than the average during the remaining one-and-a-half months of winter.”&nbsp; Indeed, extreme weather events induced by the climate crisis may not see a change in seasonal precipitation totals, but the rain or snow may fall all at once with destructive force.&nbsp; Winter weather systems in Nepal are dominated by westerly fronts riding the jetstream that travel all the way from the Mediterranean, passing through Iran, Afghanistan and Pakistan. However, in recent years, the moisture is mostly spent by the time the westerlies reach Nepal.&nbsp; “Studies have shown that the increase in sea surface temperature in the Mediterranean has made the whole region warmer and drier,” explains Binod Pokharel, another hydrology and meteorology professor at Tribhuvan University. “This has meant that the winter wind from the west carries less moisture.” Climate is also greatly influenced by the El Niño and La Niña systems that develop in the Pacific Ocean. El Niño occurs when there are above-average sea surface temperatures in the central and eastern tropical Pacific Ocean while cooling of the ocean there triggers the La Niña. The two events occur every two to seven years, on average.&nbsp; During the La Niña phenomenon, cooler sea surface temperatures in the Pacific change wind patterns, disrupting the westerlies and leading to less rainfall. Last winter the La Niña system was active when there was no rainfall in Nepal.&nbsp; However, the El Niño system replaced La Niña during the first half of 2023, and the Department of Meteorology has estimated that the El Niño system in the Pacific Ocean will persist right through this winter. Nepal has previously had more rain than average when the El Niño system was active. An active El Niño system means there will be more than average rainfall, confirms Sudarshan Humagain of the Meteorology Department. “However, it must be noted that in some years, there has been less than average rain when El Niño is active,” he adds.&nbsp; What this means is that with climate change, weather patterns have become so unpredictable that most long-term forecasts tend to be inaccurate. &nbsp; Indeed, even with an active El Niño, winter rain-bearing westerlies have not been as active as before in Nepal. Periods without rainfall are classified as drought when the total rainfall is less than 75% of the annual average. The trend so far indicates that Nepal is heading for another winter drought, with a significant part of the country not having had rainfall since October.&nbsp; Last year's winter was similarly dry with just 12.9mm of rain, the lowest precipitation recorded in the last 15 years.&nbsp; Data shows that 12 out of the last 18 winters had less than average rainfall, and eight out of those 12 winters had droughts. The trend is that winter rainfall is pushed towards the end of the season, and then it falls all at once.&nbsp; About 80% of the annual rainfall in Nepal occurs during the monsoon months from June to September, and winter generally sees only up to 4% of average yearly rain. “This means that two or three instances of heavy rain are normal for winter months,” says Humagain of the Meteorology Department.&nbsp; The 2023 Synthesis Report by the United Nations Intergovernmental Panel on Climate Change (IPCC) pointed out that Asia would experience the effects of extreme rainfall variability and drought in the short term as well as long term. The report also noted that winter temperatures are going up across South Asia and 2023 was the hottest year on record.&nbsp; “It is certain that winter rainfall is declining while winter temperatures are increasing,” explains Professor Pokharel at Tribhuvan University. “Globally, there has been a trend towards more intense rainfall in the monsoon and falling winter precipitation, and this trend could be the norm in coming years.&nbsp; The lack of winter rain and the fact that it is still too early for the winter thaw means that Nepal’s rivers are all running low. This means the country’s total hydropower generation capacity has dropped by 20%, and the shortfall has to be met by power imports from India. At present, Nepal consumes 1,305MW of electricity on average per day, and nearly one-fourth of it is being imported from India this winter. The figure is higher for morning and evening peak hours. “Power generation has declined drastically, and is expected to go down further as chances of rainfall look slim,” says Prakash Chandra Dulal of the Independent Power Producers' Association, Nepal (IPPAN) “The output of private sector projects usually drops by to 25-28% in winter.” The reason is that all private power plants are run of the river type and not reservoirs that would store monsoon rainfall. Nepal has only one reservoir project, Kulekhani which was built in 1984. The second one is finally under construction on the Seti River in Tanahu.&nbsp; Generating more electricity in winter is more profitable to hydropower producers because the state-run utility Nepal Electricity Authority (NEA) &nbsp;buys the power for almost twice the price per unit in winter compared to the monsoon standard rate.&nbsp; “The lack of rainfall and decreased river flow costs us around Rs4 million per megawatt,” says Sura Prasad Adhikari of Barahi Hydro Limited.&nbsp; Even with imports from India, Nepal’s industries are suffering from power cuts.&nbsp; Farmers across Nepal also rely on winter rain more than they do on irrigation systems. Ravi Kiran Adhikari of the Department of Agriculture says that the production of wheat, barley, mustard, lentils, citrus and vegetables is significantly reduced because of winter drought. “There is still time for the crops to revive if it rains during the remaining months of the winter,” says Adhikari, “But if there is no rain, then our crop output will be seriously affected.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240117130136_7ef5843b015cb7ae360afa5c77bcec1c0b085c0fcc5bb9d121bb38b2877ffa4a.jpg" data-media-id="editor_0" data-image-id="20240117130136_7ef5843b015cb7ae360afa5c77bcec1c0b085c0fcc5bb9d121bb38b2877ffa4a" data-rendition-name="original" width="1744" height="1000" loading="lazy" alt="Winter drought NT"> <figcaption>A NASA FIRMS image of wildfires burning in Nepal in the past week. Each dot represents a major fire detected by infrared sensors on the satellite. The picture also shows dense fog blanketing the Indian plains and the Tarai.</figcaption> </figure>  Meanwhile, lack of rain in winter increases the chance of wildfire as happened in the winter of 2021-22 when the Air Quality Index in Kathmandu soared to record-breaking 700.&nbsp; As it is, air pollution in Nepal gets worse during winter months in the Tarai and Kathmandu because of temperature inversion and industrial pollutants from north India.&nbsp; This year’s winter drought is already sparking wildfires, with 48 major fires detected by the NASA FIRMS satellite in the past week.

Nepal suffers another winter drought

Seen from a vantage point high above the Seti River near Damauli, excavators and tipper trucks look like tiny insects clawing away at a cliff. Occasionally there is the sound of dynamite blasting at the rock face. This is the Tanahu Hydropower Project, and it is an indication of how stagnant Nepal’s energy planning has been that this is only the second reservoir scheme after <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">the Kulekhani Dam</a> was commissioned in 1982. &nbsp;&nbsp; The workers have nearly completed drilling a tunnel to divert the Seti’s turbid sediment-laden water so construction of the 140m high concrete dam can begin. When completed, the reservoir will be 7.25 sq km in area and store nearly 300 million m³ of monsoon runoff. And unlike Kulekhani, the Seti is a snow-fed river originating in the glacier below Annapurna 4.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101236_c757ef30ebe38c1fb97b2e57cac11eb6c237191f067b5e6d467933afeb49023b.jpg" data-media-id="editor_1" data-image-id="20231228101236_c757ef30ebe38c1fb97b2e57cac11eb6c237191f067b5e6d467933afeb49023b" data-rendition-name="original" width="624" height="400" loading="lazy" alt="Tanahu Hydropower"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101252_1f49967359964e87c73640576b17c765f6fe153a0fbd1c11f07cefe8012b60d1.jpg" data-media-id="editor_2" data-image-id="20231228101252_1f49967359964e87c73640576b17c765f6fe153a0fbd1c11f07cefe8012b60d1" data-rendition-name="original" width="1443" height="1111" loading="lazy" alt="Tanahu reservoir"> <figcaption>The 3D modelling of the Dam in Tanahu. Photo: TANAHU HYDROPOWER LIMITED</figcaption> </figure>  A 420m head on the Seti will take water through 7.25m wide tunnels and penstock pipes to an underground powerhouse to give the scheme an installed capacity of 140MW and an annual energy generation of 587.7GWh. While this capacity is less than other projects like Tama Kosi, the stored water can be drained at peak hours and during the dry season to augment electricity supply and keep the water flowing downstream. Also called Upper Seti, this project funded by the Japan International Cooperation Agency (JICA), Asian Development Bank (ADB), European Investment Bank (EIB) and Nepal Electricity Authority (NEA) is designed for at least six hours of peak operation during the driest months of the year. “Most of Nepal’s hydropower projects are run-of-the-river projects which means we can’t store water for winter months when domestic demand is highest,” says engineer Raja Bhai Shilpakar, Tanahu's project manager. “We must shift our focus to reservoir projects now to ensure Nepal’s energy security and to reduce power import.” Indeed, while Nepal has an installed capacity of around 2,800MW in the monsoon, and sold electricity worth Rs15 billion to India this summer, NEA is still importing power from Indian thermal plants to meet 30% of the winter demand.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101228_9c08ea43a75978bd194b02fbaf030ce5413d33609ff601e70d8912b60bde69e3.jpg" data-media-id="editor_3" data-image-id="20231228101228_9c08ea43a75978bd194b02fbaf030ce5413d33609ff601e70d8912b60bde69e3" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Tanahu Hydropower"> <figcaption>GREEN ENERGY: Dam site of the under-construction Tanahu Hydropower Project with a 25km long reservoir which will be completed in May 2026. The concrete dam will be 140m in height and hold 295 million m³ of monsoon runoff. Photo: TANAHU HYDROPOWER LIMITED</figcaption> </figure>  Winter generation is low because the rivers are running low and this situation has been made worse by prolonged post-monsoon droughts. Last year, NEA said power supply fell by 20% of the winter average because there was no precipitation and melting of snow.&nbsp; In its new proposed draft, the National Planning Commission (NPC) has set a power generation target of 11,769MW in the next five years. The private sector, which generates nearly 80% of current electricity supply, is not so optimistic given the bureaucratic and financing hurdles. &nbsp; But even then, there will still be a supply shortfall unless more reservoir projects are built to even out the annual generation profile. Besides Tanahu, reservoir projects are planned on the Budi Gandaki, Tamor and Upper Arun, but those will not be ready for another ten years. Dams are also much more costly to build, and will need government involvement.&nbsp; Apart from local demands for compensation for submerged land, there are also concerns about the greater ecological impact of reservoir projects. Studies have shown that rampant dam construction leads to a decline in aquatic life, and livelihoods of people downstream.&nbsp; The other challenge is increasing risk of climate change-induced disasters like cloudbursts and Glacial Lake Outburst Floods that can wipe out expensive dams like the Chungthang Dam disaster in Sikkim in October.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101244_bf6f78d0758247f46bc156e116aacde6e20b6a02a7fa82057181914e4955f09a.jpg" data-media-id="editor_4" data-image-id="20231228101244_bf6f78d0758247f46bc156e116aacde6e20b6a02a7fa82057181914e4955f09a" data-rendition-name="original" width="1700" height="900" loading="lazy" alt="Hydropoer and dams in Nepal"> <figcaption>This underground powerhouse (centre) will give installed capacity of 140MW and an annual energy generation of 587.7GWh. Photos: SONIA AWALE</figcaption> </figure>  Nepal’s own Kulekhani was supposed to have a lifespan of 100 years but a cloudburst in the catchment area in 1993 deposited so much debris into the lake that the cascade power plants that generate 106MW of electricity from it will now function only for another 30 years.&nbsp; Shilpakar who was also involved in the Kulekhani project says lessons have been learnt, and Tanahu will have a flushing gate to drain sediment from the reservoir. It is considered too far downstream to be at risk from glacial lake bursts. &nbsp;The dam is also built to withstand earthquakes of much higher intensity than the 2015 event.&nbsp; “Tanahu is a concrete gravity dam with a much larger catchment than Kulekhani,” he explains. “But rainfall patterns have changed drastically. So we have added two flushing gates, increasing the dam’s lifespan to 120 years.” Despite the downside, most experts agree that reservoirs are crucial for flood control and dry season irrigation downstream, especially as water supply becomes scarcer with the climate crisis. Reservoirs also have other benefits like fisheries, inland navigation and tourism, as seen in Kulekhani. “In many ways, reservoirs are not just clean energy projects but also climate adaptive initiatives,” says Pushkar Manandhar of the ADB. “Storage hydropower serves as a buffer to cope with erratic rainfall and act as a shock absorber. They store water to augment lean season flow of rivers.” But water is a <a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">geopolitical hot potato in the region</a> with India’s increased involvement in building river schemes in Nepal, including Pancheswar Dam on the border Mahakali River, Arun III, West Seti reservoir, and other projects. Experts say India’s real interest is in water supply, and would not mind if it gets regulated water for free from reservoirs like Tanahu in Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101240_f5a3473abe0186d1fb7842724607238abd3c8671c91c8e8a4bfebfbc63591aa4.jpg" data-media-id="editor_6" data-image-id="20231228101240_f5a3473abe0186d1fb7842724607238abd3c8671c91c8e8a4bfebfbc63591aa4" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Hydropoer and dams in Nepal NT 1"> <figcaption>Tanahu hydropower dam site.</figcaption> </figure>  But India is playing hardball by refusing to buy electricity from projects it deems to have Chinese investment or involvement. In Tanahu, meanwhile, engineers are running out of explosives because of a ban on export of dynamite by India.&nbsp; Says Shilpakar: “No contractor is getting an explosive permit from India and we cannot get any from the Chinese either, we need the government-to-government deals otherwise the project could be delayed.” Tanahu also includes the construction of a 220kV double circuit Damauli-Bharatpur transmission line and is looking at a completion date of May 2026. There are also plans for a 126MW Lower Seti cascade project with a dam at Saranghat, and a powerhouse at Mugling to generate 520GWh. Experts say that along with new reservoir projects, Nepal now needs to <a href="https://nepalitimes.com/news/balance-of-power">pay attention to transmission and distribution</a> to streamline supply so that domestic consumption increases. &nbsp; “We didn’t develop all aspects of hydro schemes in parallel,” says ADB’s Manandhar. “We focused mostly on generation and now there is a real bottleneck in transmission and distribution.” Kathmandu is a load centre, but transmission lines do not have the capacity to bring the electricity from power plants in central and eastern Nepal.&nbsp; “We have to build substations to future-proof supply, but there are issues with right of way and land acquisition,” Manandhar adds.&nbsp; Which is why NEA is working at speed to upgrade its substation in Siuchatar, with a state-of-the-art Distribution System Control and Data Centre so that power supply to localities in the Valley can be monitored and controlled more efficiently.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_dae5f9c304943d4efb156a9930b0ca1894b2f6b915abeb6c30d510e0f246e4a5.jpg" data-media-id="editor_8" data-image-id="20231228101248_dae5f9c304943d4efb156a9930b0ca1894b2f6b915abeb6c30d510e0f246e4a5" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Distribution substations"> <figcaption>Distribution System Control and Data Centre in Siuchatar.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101252_fb9c41952a2c918b2a8eccbd5483bcd28378e43eb533d3edfcd2c2b82a495255.jpg" data-media-id="editor_9" data-image-id="20231228101252_fb9c41952a2c918b2a8eccbd5483bcd28378e43eb533d3edfcd2c2b82a495255" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Transmission lines"> </figure>  “If there is a fault in distribution, we will be able to see it from here, we won’t need locals to call us anymore,” says electrical engineer Dhirendra Bajgain. “At the same time, we will be able to quickly restore the fault, in minutes instead of hours by just isolating that area.” But elsewhere, like in the Dana substation near Kushma of Parbat district, authorities are dealing with a different kind of <a href="https://nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">power spill</a>. Pritam Raj Bista of the Parbat Distribution Centre says that while there is 100% electrification, the total number of consumers is decreasing due to depopulation.&nbsp; In contrast, nearly 170km south in Dhakdahi near Butwal, demand is peaking with local industries complaining about not getting dedicated feeder lines on time. Even when Nepal did away with power rationing, the area was still facing power cuts until Dhakdahi substation was set up a few years ago. The new substation shared the power load with the Butwal substation and the area has been getting improved voltage and power quality.&nbsp; At the recently inaugurated Kushma-New Butwal 220kV substation to evacuate power from the Kali Gandaki Transmission Corridor, the NEA’s Kulman Ghising said his main priority now was to invest in transmission and distribution infrastructure. “Butwal is critical because it is at the intersection of the Kali Gandaki corridor in central Nepal and the East-West transmission artery,” Ghising said. “It is a pooling hub for power transmission and distribution westwards and for export to India.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_635bc1ff0aec0f15a1874a56b81d61113abcd8f5d2ded97271c5c90f20ecd643.jpg" data-media-id="editor_11" data-image-id="20231228101248_635bc1ff0aec0f15a1874a56b81d61113abcd8f5d2ded97271c5c90f20ecd643" data-rendition-name="original" width="1220" height="1500" loading="lazy" alt="Transmission lines"> <figcaption>Transmission lines at the recently inaugurated Kushma-New Butwal 220kV substation which will evaculate power from the Kali Gandaki Transmission Corridor. </figcaption> </figure>  Indeed, these transmission lines will dovetail with t<a href="https://nepalitimes.com/editorial/challenge-of-the-millennium">he Millennium Challenge Compact</a> (MCC)-supported lines from Hetauda via Damauli. The challenge now, Ghising says, is local compensation demands to transmission lines which have delayed them.&nbsp; “Our field staff spend 90% of their time dealing with local opposition, social and environmental regulations,” he added. Transmission lines under the MCC project are likely to face even stronger opposition because of <a href="https://nepalitimes.com/editorial/the-message-is-the-medium-z5w3ekk2">political opposition to the US-funded initiative</a>, and local belief that the project has lots of money.&nbsp; If Nepal is to save its economy and meet net-zero targets by 2045, increasing domestic demand should be the priority, and for this, reservoir projects, transmission lines and distribution infrastructure are key.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_985e74ee96fef5c92a828612ff7c97a05ba34a61c490a5e578f3c592af986584.jpg" data-media-id="editor_14" data-image-id="20231228101248_985e74ee96fef5c92a828612ff7c97a05ba34a61c490a5e578f3c592af986584" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Transmission lines"> </figure>  Nepal could export more electricity but India is buying less than 700MW from Nepal because of <a href="https://nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">Chinese involvement in projects</a>. It is therefore in Nepal’s own strategic interest to increase domestic demand as much as possible.&nbsp; Even if Nepal could sell all its present electricity generation, it would amount to a mere Rs20 billion against an annual trade deficit with India at a staggering Rs840 billion. &nbsp; Instead, if <a href="https://nepalitimes.com/here-now/fueling-nepal-s-economic-crisis">we reduce just 10% of our petroleum bill</a> by electrifying industries, household use and transport, Nepal can save at least Rs30 billion a year. Improving public health and ecology will be a bonus.&nbsp; “If we sell electricity, we just get cash benefits but if we were to make the maximum use of our power within the country, there will be cascade impacts,” says engineer Raja Bhai Shilpakar. “We can revolutionise our industries and manufacturing, create jobs and prevent young talented people from migrating.” &nbsp;

Missing pieces of the hydropower jigsaw

Since the 1950’s Nepalis have dreamt of developing the country’s enormous hydropower potential for industrialisation and export to India.&nbsp; Nepal chose to avoid the path followed by Bhutan of handing over design, financing, and construction of hydropower to India. Policy makers tried instead to maintain control by soliciting assistance from bilateral donors and multilateral development banks to finance power projects using grants and concessionary loans.&nbsp; But as the size of investments increased, it resulted in greater reliance on international aid and technical assistance. Projects were typically designed by global consultants and constructed by international contractors through competitive bidding and once completed were handed over by the government to Nepal Electricity Authority (NEA) to own and operate.&nbsp; By the 1980’s a flaw in this approach had become clear: it had created another kind of dependence and loss of control. The electricity produced was expensive since these projects, although funded through grants or loans on concessionary terms, were transferred to NEA’s books at the full cost of the assets which needed to produce returns.&nbsp; A more debilitating effect was that almost no technical or financing capacity was transferred to NEA for the next power plant without more aid. As international assistance was always in short supply, Nepal’s hydropower development proceeded slowly and the electrification rate lagged at 15% in 2000. There was little prospect for exporting power since it was so expensive, and there was chronic domestic shortage.&nbsp; In his book What Went Right: Sustainability versus Dependence in Nepal’s Hydropower Development, Mark Liechty who is professor of anthropology and history at the University of Illinois at Chicago skillfully narrates the inspirational story of Nepal’s alternative hydropower development. &nbsp; At centre are Norwegian missionary <a href="https://archive.nepalitimes.com/blogs/kundadixit/2009/11/19/norwegian-guru/">Odd Hoftun</a> and his colleagues, who over the course of five decades, did not just build power projects but laid the foundation for a vibrant domestic energy sector with thousands of competent Nepali engineers and technicians, hundreds of independent power producers, and dozens of construction companies, equipment manufacturers and engineering consultancy firms.&nbsp; This book should be required reading for development practitioners and aid agencies interested in critically examining how to get the best returns from international development assistance. Liechty recalls the strategy to develop hydropower that was quietly taking shape in Butwal in parallel with the Kathmandu-centeric public sector-led model funded by the county’s major donors. The ‘Butwal Model’ emphasised vocational training and learning opportunities in the manufacture of components and by building actual power plants.&nbsp; Training of skilled manpower was born out of necessity in a region of the country with no industrial base, very few schools, and certainly none that imparted specialised technical skills required for hydropower development. The second element was the formation of local private companies to design, construct, and operate hydropower projects initially to electrify the training institute and supply nearby urban and rural communities, and eventually to feed surplus power to the NEA grid as the Butwal companies constructed larger power plants.&nbsp; As the companies grew in size and sophistication, they attracted increasing numbers of Nepali engineers, trained at universities and technical colleges in India and Kathmandu, who sought more a challenging professional work environment than at NEA. International experts from over a dozen countries, worked as volunteers alongside Nepalis training technicians, managers and entrepreneurs on the job.&nbsp; The training was as important as the construction of hydropower plants. The power projects were also initially funded with international aid, <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">mainly from the Norwegians</a>, but it was sympathetic to the vision of using project design and construction as an opportunity to build lasting human capacity in Nepal.&nbsp; Hoftun came to Nepal as a Norwegian Christian missionary and was primarily responsible for conceiving and initiating the Butwal hydropower development model. His development philosophy grew organically as a series of practical steps required to meet needs, rather than as a fully thought through answer from the beginning. <a href="https://nepalitimes.com/news/odd-hoftun-missionary-engineer">Hoftun died aged 95</a> earlier this year. Hoftun believed in frugal use of resources, a framework of moral business practices, and a belief that private companies working under ethical principles were the most efficient vehicles for Nepal’s economic development. That philosophy resonated with Hoftun’s Nepali colleagues such as Balaram Pradhan, who may not have shared his religious faith, but found strong overlap with their own commitment to national development.&nbsp; Hoftun first came to Nepal in 1958 to build Tansen Mission Hospital, the only modern medical facility at the time in the region. He had to train masons, carpenters and electricians realising on completion that he had also developed a cadre of technicians.&nbsp; He established the Butwal Technical Institute (BTI) 40km south of Tansen to provide on-the-job training to Nepali teenagers in metal welding, carpentry and electrical vocational skills. Requiring a reliable power source for BTI he invited the skilled workers trained in Tansen to construct, in stages, the 1 MW <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">Tinau project</a> starting in 1965, with the first 50 kW completed in 1970 and the final stage in 1978.&nbsp; The <a href="https://archive.nepalitimes.com/news.php?id=14224#.ZBMygi8RqLc">Butwal Power Company (BPC)</a> was formed in 1965 as an electrical utility to oversee construction as well as to operate the power plant and supply power to BTI along with the residents and small-scale industries of Butwal. This virtuous cycle of building ever larger &nbsp;hydropower projects and training more people went on for 30 years, with the 5MW <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">Andhi Khola</a> (1990) and the 12MW Jhimruk (1994).&nbsp; <a href="https://archive.nepalitimes.com/article/nepali-times-buzz/power-for-nepal-review,2884">Hoftun’s approach</a> of starting with labour intensive technique to dig tunnels and utilising refurbished second-hand hydropower equipment from Norway resulted in Tinau and Andhi Khola being built at a fraction of the cost of power plants being constructed for NEA. Hundred percent construction by Nepali companies meant that even the Jhimruk power plant which used mechanized drilling and all new electro-mechanical equipment was completed at around one third the per MW cost of larger NEA-owned projects.&nbsp; This alternative model came with challenges. Liechty details conflict Hoftun faced with fellow missionaries who believed their commitment was to serve the poor in Nepal through health and education rather than economic development through private companies. Working with government meant getting permissions every step of the way from bureaucrats who did not always Hoftun’s development philosophy.&nbsp; Liechty also documents how the model hits its limits when Hoftun attempted to mobilise financing for the <a href="https://archive.nepalitimes.com/news.php?id=16217">60MW Khimti</a> in partnership with international private companies, the World Bank and Asian Development Bank. As project size grew and international commercial financing was required, the Butwal model also obey diktat of donors. Khimti was eventually financed and constructed after meeting all the requirements of international lenders but at significantly higher cost, and in the process BPC’s ownership &nbsp;came down from an initially planned 50% to just 15%. &nbsp; I was one of the Nepali engineers that joined the Butwal effort after completing my overseas engineering degree and was able to see firsthand how Nepali companies and technicians were able to construct high quality hydropower projects at affordable costs.&nbsp; That experience moved me to form the Alliance for Energy in 1993 with other <a href="https://archive.nepalitimes.com/news.php?id=11082">likeminded activists</a> to oppose the construction of the <a href="https://archive.nepalitimes.com/news.php?id=1864">201MW Arun III</a> being planned by NEA using the conventional model with no prospect for increasing national capacity and reducing aid dependence.&nbsp; Our concern was that at a price tag of $1.1 billion the project was unaffordable for Nepal compared to viable alternatives. Arun III would cost ten times as much per MW as Andhi Khola. We were also concerned that it was overly risky for the country to develop a single, expensive mega project, at one end of the country. It would be wiser to support a dozen smaller projects throughout Nepal to generate the same amount of power, using the Butwal model and in the process augment in-country capacity.&nbsp; The World Bank and other funders withdrew their support to Arun III in 1995, accepting NEA could not satisfactorily meet its environmental, social and management responsibilities. The Alliance had proposed donor-financed alternatives, but even without them Nepal now has a vibrant and competitive hydropower sector with over two hundred <a href="http://www.ippan.org.np/ippan-members">Independent Power Producers</a> with financing from <a href="https://www.martinchautari.org.np/storage/files/sinhas-vol20-no2-lecture-bikash-pandey.pdf">dozens of Nepali banks</a>. Many of the leaders of these companies got their start in hydropower at BPC and its sister companies.&nbsp; Liechty’s book provides important documentation of what it takes to do good development in one of the world’s poorest countries – in contrast with conventional development assistance as practiced by international donors when they prioritise building infrastructure rather than building capacity.&nbsp; It may be slow but building domestic capacity is the only way for countries to develop sustainably. This book will hopefully inspire a new generation of activists, entrepreneurs, engineers, and economists to demand that development aid coming in their name be required to meet a higher bar.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231113051112_a219c653de5332dec6c53f816721fbb6380ff234297a967370bf6b788f83632d.jpg" data-media-id="editor_12" data-image-id="20231113051112_a219c653de5332dec6c53f816721fbb6380ff234297a967370bf6b788f83632d" data-rendition-name="original" width="476" height="532" loading="lazy" alt="What went right book review"> </figure>

Bikash Pandey

Small is bountiful

Nepali hydropower industry is poised to play a bigger role in Nepal’s energy transition to meet its 2045 net zero target. Nepal Hydropower Association (NHA) last month hosted a ‘Made in Nepal’ booth at the Hydro23 conference in Edinburgh which was attended by 1,000 delegates from 70 countries. There were over 30 delegates from Nepal. The Nepal booth showcased and promoted Nepali hydropower expertise, experience and its ability to offer a diverse range of services across the whole hydropower value chain in emerging markets for projects up to 100MW. This was a show of Nepal’s new confidence in the experience its technicians and engineers have gained in the past decades. With its natural geographical advantage, Nepal actually has over 100 years of experience in hydro-electricity, with <a href="https://nepalitimes.com/here-now/nepal-s-1st-hydroelectric-plant-is-a-museum-piece">Pharping being only the second hydropower plant in Asia</a> when it was built in 1911. In his new book What Went Right: Sustainability versus Dependence in Nepal's Hydropower Development, US professor Mark Liechty explains why Nepal’s hydropower sector has been such a success among the many development models that Nepal’s donors experimented with over the last seven decades. Liechty traces the history of indigenous capacity in Nepal’s hydropower with capital financing, tender bid process, EIA, engineering consulting, construction, generation, maintenance, transmission to distribution. Nepalis also gained experience in project management and delivery along with increased sophistication of the local high precision machining and tunnelling expertise in the challenging Himalayan geology and climate. Nepal’s Ambassador to the UK Gyan Chandra Acharya said: “Nepal’s hydro industry has a unique position and readiness to contribute to reducing greenhouse gas in South Asia and beyond. This global interaction can only be mutually beneficial.” There are now 130 hydroelectric plants in Nepal delivering nearly 3,000MW, with another 240 plants under construction. Such an experience and a steep learning curve in a short development period has meant that the sector has proven that it can build hydro projects at speed and at a competitive price globally. Evidence of this is the trend towards Chinese contractors outsourcing some of their hydro engineering design work to Nepali engineering consultancies. The output and competitive consulting fees proves that Nepal’s engineering design is ready to do business globally. Nepal’s Energy Secretary Dinesh Ghimire told the Edinburgh gathering: “Made in Nepal can be a platform to share Nepal’s successes and tell the world that we are ready to do business by selling its hydropower building expertise.” Hydro Consult Engineering, a company with 30 years experience in Nepal promoted its services and capabilities in Edinburgh. It has completed projects in Pakistan, and two small new plants are in the pipeline in Kenya and Uganda. Hydro’s CEO Manohar Shrestha said: “We are excited with our international projects. They are challenging, but we are confident that these projects are a growth and learning opportunities for us.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231106141148_586f173e596cfd0fd49f3822431958a9fea0fe59293a3fa431b1d357e452e27a.jpg" data-media-id="editor_1" data-image-id="20231106141148_586f173e596cfd0fd49f3822431958a9fea0fe59293a3fa431b1d357e452e27a" data-rendition-name="original" width="1600" height="1066" loading="lazy" alt="Hydro 2023"> <figcaption>Nepal Hydropower Association at Hydro23 conference in Edinburgh.</figcaption> </figure>  Conference organiser Alison Bartle publisher of the journal Hydropower and Dams said that the world is becoming aware of Nepal’s speed of advancement within the sector despite its geological and geopolitical challenges. “Nepal is fast becoming a hydro hub in the region,” she added. “We are especially happy that Nepal is cultivating cross border partnerships and exploring electricity trade with India and Bangladesh. It is a game changer.” Delegates said the next steps were for NHA and the Ministry of Energy, Water Resources and Irrigation to support the industry’s growth, and project Nepal was a model for successful energy transition at climate summits including at the COP 28 in Dubai this month.

Nepal's hydropower goes international

Probably the best thing to happen to Nepal’s economy lately is India’s refusal to buy more electricity. It could eventually force the government to <a href="https://www.nepalitimes.com/editorial/challenge-of-the-millennium">expedite transmission infrastructure</a> and increase domestic demand. Nepal Electricity Authority (NEA) is losing billions in <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">spilled power </a>this monsoon because it cannot evacuate power. Some private producers have actually stopped generating altogether. Installed hydropower capacity is touching 3,000MW this monsoon, and projects for a further 3,300MW are under construction. But domestic consumption is stuck at 1,700MW. Nepal could export electricity, but India has agreed to buy only 452MW from projects with <a href="https://www.nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">no Chinese involvement</a>. Even if the full quota was exported, Nepal would only earn NPR20 billion, whereas the trade deficit with India is at NPR840 billion and growing. In fact, Nepal imported NPR20 billion worth of power from India last year to cover its dry season deficit.&nbsp; “At the current rate, if we do not put up transmission lines in time, by 2025 we will be losing electricity worth 120 million every day in winter and Rs170 million during the monsoon,” warned Kathmandu University engineering professor Bishal Silwal at at a recent seminar.&nbsp; NEA blames delays in substations and transmission lines on <a href="https://archive.nepalitimes.com/article/nation/high-tension-in-sindhuli,1297">locals blocking construction</a>. Kathmandu Valley therefore faces frequent power outages due to tripping even there is enough power in the grid. “The problem right now is not of supply but infrastructure,” former NEA head Hitendra Shakya explained at the seminar. “It is a result of poor planning.”&nbsp; There is also lack of coordination between various agencies of government to encourage domestic consumption with tax rebates for industries, battery-powered vehicles and household appliances. An average Nepali consumes 325kWh of electricity, much lower than the global per capita of 3,180kWh. Former energy secretary Dwarika Nath Dhungel, who is the author of a new compendium on the political economy of hydropower, says: “Exporting electricity should be the last thing on our list. We might be generating surplus but we still import power from India during winter, let’s first try to use the surplus to replace that import.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230825050844_432c12cd7043c2c38c9ef9dab2df1d12416c734c0f8dc4e46af5f14a6419e30f.jpg" data-media-id="editor_4" data-image-id="20230825050844_432c12cd7043c2c38c9ef9dab2df1d12416c734c0f8dc4e46af5f14a6419e30f" data-rendition-name="original" width="3000" height="3073" loading="lazy" alt="Page 1"> <figcaption>Photo: BIKRAM RAI/NEPALI TIMES ARCHIVE</figcaption> </figure>  Indeed, while some 95% of Nepal’s population is said to have access to electricity, districts like Bajhang, Dolpa, Bajura, Jumla and Mugu are not yet connected to the grid. Nepal’s wetter eastern half has most of the hydropower generation capacity, while the more arid west does not have enough. Surplus power could also jumpstart Nepal’s struggling industries, the tourism sector and agriculture. This in turn would create jobs so Nepalis are not <a href="https://www.nepalitimes.com/news/nepalis-in-the-russian-army-want-to-quit">forced to migrate abroad</a>. “Hydroelectricity should be a crucial element of our national development strategy so we make its maximum use domestically and for employment. Only then should we be exporting power,” says Dhungel. NEA can earn more from selling power domestically. Private industries are paying up to NPR11 per unit whereas the average price of electricity sold to India is just NPR4.33 per unit. <a href="https://www.nepalitimes.com/opinion/comment/securing-nepal-s-electric-future">Using electricity</a> to slash Nepal’s petroleum import bill by just 10% would save the country at least NPR30 billion a year, and be a faster way to decrease the trade deficit with India. Improving public health by cutting pollution would be a bonus. Nepal’s <a href="https://www.nepalitimes.com/news/nepal-india-power-play">balance of power with its two neighbours</a> is also getting skewed with a tilt towards India, as New Delhi leans on politicians here to systematically cancel Chinese investments in hydropower. Experts say India’s real interest is in regulating Nepal’s rivers to ensure future water supply rather than electricity. “Politicians spout non-stop nonsense about how they will make the country rich by exporting electricity when water is our strategic commodity,” says Dhungel. “They are trading our water resources to stay in power by keeping a certain neighbour happy. One has to wonder if Singha Darbar is making decisions or the Delhi Darbar.” Successive governments of K P Oli, Sher Bahadur Deuba and now Pushpa Kamala Dahal have all awarded one hydropower project after another to Indian state companies which are now building projects that will generate a combined total of 4,000MW. More Indian projects are in the pipeline. With the rise of China and India as global players and the new Sino-US cold war, <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">Nepal has become a geo-strategic hotspot</a>. But it is now also a climate hotspot, and shrinking glaciers will affect electricity generation and the hydrology of Himalayan rivers.&nbsp; Dwarika Nath Dhungel sums it up: “We can’t change our neighbours but we can understand their aspirations better so that we have leverage when dealing with them. But first, we have to become stronger by making the best use of our own resources domestically.”

Balance of Power

Tipper trucks piled with cement rumble along the rocky 15km road that runs alongside the Trisuli River that flows out of glaciers in Tibet and tumbles through mighty gorges into Nepal. &nbsp; It is the steep gradient of this frothing river that makes it so ideal to generate hydropower. Which is why there are eight existing or planned run-of-the-river schemes in a cascade along the Bhote Kosi. The narrow valley reverberates with the roar of excavators, drills and a mix of Korean, Chinese and Nepali voices among the workers in the newest plant under construction on the river: the Rs65 billion 216MW Upper Trisuli-1 hydropower project. Despite its proximity to Kathmandu, Rasuwa had largely been bypassed in Nepal’s infrastructure development. Even after India helped build the Trisuli (1967) and Devighat (1984) plants, investment here languished. But after 1990, politicians started promising that the district would prosper from the ‘white gold’ of the Bhote Kosi, there would be jobs, industries and money would pour into the local economy.&nbsp; The biggest and newest of these projects is the Upper Trisuli-1 and it was sold to the indigenous Tamang community as their economic salvation. But far from jobs and economic benefits, local farmers have seen the destruction of their ancestral land and sacred sites.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">Geopolitics of Nepal’s rivers</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_50d23587983b4e48dee2b5a387824cd152192d41f5ffbc5ec4ec62ffd973ce20.jpg" data-media-id="editor_1" data-image-id="2023061915060_50d23587983b4e48dee2b5a387824cd152192d41f5ffbc5ec4ec62ffd973ce20" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  “We had hoped that this project would finally bring us resources for local development that we sorely needed, but it has only made our lives more difficult,” says Ashabir Tamang from Mailungbesi village by the Bhote Kosi. A decade has passed since the Nepal Water and Energy Development Company (NWEDC) began exploring the Upper Trisuli-1 project in Mailungbesi. Financing was secured from Korea (75%), the International Finance Corporation (IFC) with 15% and 10% from the local Nepali partner Bkesh Pradhanang. Asian Development Bank, Asian Infrastructure Investment Bank, Dutch Development Bank and other international banks also have investments. During the project design phase the IFC, which is also the primary loan manager for the project, had stipulated that its PS-7 performance criteria be applied to the project. The stipulation seeks to ensure that business activities minimise negative impacts, foster respect for human rights, dignity and culture of indigenous populations, and promote development benefits in culturally appropriate ways. The NWEDC was therefore forced to enter into an FPIC agreement (Free, Prior and Open Consent) with the indigenous Tamang community. Nepal became a signatory to the ILO Convention 169 in 2007, which gave local and indigenous communities the right to have a say in benefits. This agreement between the NWEDC and the Indigenous Advisory Council that represents the local community, and the local government stated that about Rs140 million would be spent on sustainable socio-cultural and economic development projects in five years. Read also:<a href="https://www.nepalitimes.com/news/nepal-india-power-play"> Nepal-India power play</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_6bf538032acd41023e2277af852adaee745be79e59f4d32261ff02d3ede9bddf.jpg" data-media-id="editor_3" data-image-id="2023061915060_6bf538032acd41023e2277af852adaee745be79e59f4d32261ff02d3ede9bddf" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  Although it required that the consent of local communities would be needed before land acquisition and resource management began, the request was made only when the project reached the implementation stage. Says Ashabir Tamang, who is also vice-chair of the Indigenous Advisory Council: “The funding for indigenous development projects that we agreed on has not yet been released, the company is violating the contract and cheating us.” NWEDC Director Giriraj Adhikari admits the company is yet to release the funds as per the agreement, but adds that the company needs to adhere to the financial protocols of international partners involved in the project. "Funds have already been allocated for local welfare, but procedural issues have meant that they have yet to be sent to Nepal from overseas,” he says. Upper Trisuli-1 is the first infrastructure project in Nepal to try to implement an FPIC agreement to increase self-employment for local communities and minimise adverse environmental effects. However, local activists say the agreement applies to only 10 out of 21 areas in the project site, and does not include outlying communities and it disregards their customs and institutions. Residents also have complaints about lack of compensation for damage to property during construction-related demolition and river diversion. &nbsp;On top of that, forests, rivers, wetlands and traditional grazing areas locals have used for generations are located in areas surrounding the intake and powerhouse.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">The geopolitics of Nepal’s water and electricity</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_dbbc8e1be28bb2dfe2b3886ee3a4b3a69c4126e21c8703ef62477a8808c3984f.jpg" data-media-id="editor_5" data-image-id="2023061915060_dbbc8e1be28bb2dfe2b3886ee3a4b3a69c4126e21c8703ef62477a8808c3984f" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Rasuwa NT 1"> </figure>  Ashabir Tamang's gripe is that the project has not fulfilled a single obligation to local residents and has essentially bypassed the community on whose land the project is being built. “With the monsoon soon coming, we live in constant fear that landslides will wipe out our entire village,” says Tamang. “Where do we go to complain? No one listens to us.”&nbsp; The memory and fear of landslide is real and fresh. Mailingbesi’s 60 households were nearly entirely buried in the 2015 earthquake, and 20 residents lost their lives. Among those killed were nine members of Ashabir Tamang’s own family, including his young grandchildren. There are 790 other households in surrounding villages that were also impacted by the earthquakes. Many of them never received the promised government grant to rebuild.&nbsp; Eight years after the earthquake, many homes are still buried in debris. The boulders and soil have still not been cleared. Only half of Mailungbesi’s population remains in the village, while the rest have moved on to other villages in Rasuwa and Nuwakot.&nbsp; Those that remain face a host of problems, including where to send their children to school, the nearest primary school is a half-hour walk away in Salletar. Parents wait in fear, hoping their children will not be hit by rockfalls on their way to and from school. Read also: <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">Nepal’s precious electricity going waste</a>, Anita Bhetwal  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_977d7508a26d0ccbc3d8bcf633b67a9cd09ab0081f57d89f8662836d801196be.jpg" data-media-id="editor_7" data-image-id="2023061915060_977d7508a26d0ccbc3d8bcf633b67a9cd09ab0081f57d89f8662836d801196be" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  “It is like waiting for another disaster to strike,” says Som Bahadur Tamang, another resident. Project-related demolition work, tunnel construction as well as the constant movement of heavy earthmoving vehicles have destabilised the slopes, the ground shakes constantly, and rocks frequently fall from the cliffs above. Kanchhi Maya Tamang tells us of her fears. She says, “I do not worry so much during the day, but I lie awake at night wondering if the river will sweep away our house with us inside or a landslide will bury us alive.”&nbsp; Inaam Tamang rebuilt his house with concrete after the earthquake, but says cracks have appeared and one of the rooms was carried away by the river when the project diverted the river. “No one listened to us when we asked that walls be built around our homes to protect us,” he says. “They do not care about us small people.”&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/comment/securing-nepal-s-electric-future">Securing Nepal’s electric future</a>, Kumar Pandey  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_4a0d1555b13f97199910a8d23b8f4379fdefd44c9f39cb102eb6e3d989d2ddef.jpg" data-media-id="editor_9" data-image-id="2023061915060_4a0d1555b13f97199910a8d23b8f4379fdefd44c9f39cb102eb6e3d989d2ddef" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  Down in Hakubesi and Phulbari, 110 households were displaced by the project and only got partial compensation. Locals are also angry that while there are able-bodied men looking for jobs in the villages, the project is bringing in drivers and construction workers from outside. &nbsp; Kanchhi Maya Tamang, 55, was hired as a cleaner, but sacked for being too old. “Do you think someone who has carried fodder and firewood from the mountains all her life is not strong enough to sweep the floor?” she asks.&nbsp; Saraswati Tamang, who owns a grocery store in Mailungbesi, says she has not seen the expected boom in business after the project got going. This despite there being 800 Nepali, Chinese, and Korean technicians living in the area. “They bring everything from Kathmandu,” she says. “Not just groceries, even live chicken, ducks, goats and pigs. We have not gained much, we were just uprooted.”&nbsp; Director Adhikari refutes allegations that locals were not given jobs, and says 900 residents were hired and given project-related contracts. But &nbsp;admits that even though the company is taking initiatives to ensure benefits to the local economy, not all demands can be met.&nbsp; Read also: <a href="https://www.nepalitimes.com/multimedia/nepal-s-first-hydropower-from-a-glacial-lake">Nepal’s first hydropower from a glacial lake</a>, Kunda Dixit

Nepal’s curse of the white gold

This is the first instalment in a new limited series in Nepali Times on the historic transportation infrastructures of Nepal. Nepal’s Forest Railways As<a href="https://nepalitimes.com/here-now/india-s-border-trains-that-connected-nepal"> India’s railway network </a>expanded in the 1890s and 1900s, the demand for wooden railway sleepers, called ‘ties’ in America, likewise increased. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/the-rana-reign-a-recap-of-history,3751">Rana regime</a> realised that western Nepal’s dense forests, from which sal trees could be extracted and sold, represented a valuable source of revenue. There was a problem of accessing large tracts of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">Tarai forests</a>. However, once Indian railway lines are extended to Nepal’s border in several places, this issue could be resolved by constructing logging railways, also known as ‘tramways’ or ‘light railways’. The Nepal Government awarded a contract to Punjabi timber contractors to supply 15,000 sal sleepers to Chandan Chauki station of India’s Oudh &amp; Rohilkhand State Railway in 1908. The contractors also received a concession to construct a steam tramway to run 48km into <a href="https://nepalitimes.com/banner/reviving-nepals-community-forestry-success-story">Nepal’s forests</a> for cutting and transporting trees. The author found no records, however, indicating that such an ambitious tramway was built in 1908. The hewn logs were probably carried into India by bullock carts or <a href="https://nepalitimes.com/news/elephants-become-white-elephants">elephants</a>. The earliest known forest railway in Nepal was built in 1914 in the southwestern corner of the present-day Parsa district. A British engineer went to the Indian border town of Bikna Thori to plan a 4-mile portable light railway for the transport of timber from <a href="https://nepalitimes.com/here-now/on-the-tri-junction-of-wildlife-conservation-conflict-and-co-existence">the forest of Chitwan </a>to the Thori depot on the Bengal &amp; Northwestern Railway. This short line was laid upon wooden sleepers, and its rails could be taken up and repositioned when logging in one section of the forest was completed. This forest railway was in operation at least through 1917.&nbsp; A few year down the line in 1923, J V Collier of the Indian Forest Service built a narrow-gauge railway in Kailali district also to export of timber to India. This line, the Nepal Government Forest Railway, departed Chandan Chauki in Uttar Pradesh and ran 48km northwest into Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd.jpg" data-media-id="editor_6" data-image-id="20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd" data-rendition-name="original" width="1130" height="689" loading="lazy" alt="Nepal's little railways"> <figcaption>A Nepal Government Forest train in Kailali District hauling sal sleepers in 1925. Photo: DAVID CHURCHILL </figcaption> </figure>  It was a 2-foot railway supported by 11kg rails. The line was ‘temporary’ in that as sal trees were thinned out in one area, railway tracks were shifted to uncut areas of the forest. The railway crossed seven small <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">rivers</a>, but the bridges were taken down during the summer and monsoon. Trains ran only from November to April. This forest railway purchased four 4-6-0T ‘tank’ engines built in Leeds, England. Each bogie could carry 100 broad-gauge sleepers, and two engines were needed to haul a 21-car train loaded with 2,100 sleepers. This huge commercial forest operation once employed about 14,000 men, most of them Indians. During one season, nearly 800,000 broad and metre-gauge sleepers were exported to India. When India suffered a depression in 1930, large scale operations came to an end. Read also: <a href="https://nepalitimes.com/news/rust-in-peace?fbclid=IwAR1_eg88TCOS6RGRW1af7WvaWx5mzh_rY8-vT1MnJxSs41QtCpaA988oXk8">Rust in peace</a>, Daniel W Edwards  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5.jpg" data-media-id="editor_9" data-image-id="20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>Rails extended north from this spot into the virgin sal forests of Bardia in western Nepal 100 years ago.  DANIEL W EDWARDS</figcaption> </figure>  A third railway was built in <a href="https://nepalitimes.com/here-now/the-big-bulls-of-bardia">Bardia </a>where some scattered rails and signs of an old roadbed were seen in the 1960s. It ran from Nishangada in India to Khairbhatti in Nepal. From there, stations heading south were Ranipur, Karmak, Taratal and Madhuwan. Collier likely <a href="https://nepalitimes.com/here-now/nepal-train-project-struggles-to-stay-on-track">built this railway </a>as well in the 1920s. An elderly man in Bardia in 2022, whose father had worked on this forest railway, was interviewed for this account. Kathmandu Valley’s Motor (Trolley) Railway Merchants importing goods from India via the<a href="https://archive.nepalitimes.com/article/business/ropeways-connecting-nepal,1749"> ropeway</a> Chandra Shamsher built in 1927 had to go to the ropeway’s terminus at Matatirtha near Thankot to claim their goods and then haul them 6km to the customs house Bhansar Adda at Teku for clearance and payment of customs duties. The Motor Railway was built to carry goods from the<a href="https://archive.nepalitimes.com/news.php?id=16839"> ropeway station </a>directly to the customs office, making it cheaper and more convenient for merchants to receive their shipments. In December 1931, Prime Minister Bhim Shamsher issued an order (sanad) putting Lt Gen Singha Shamsher Rana in charge of building this rail line to Teku and on to ‘Nabalak Khana’ in Tripureswar, a distance of 10km. The project was subdivided into four sections or ‘phant’, and for each, budgets and timelines were established. There was bato phant (constructing the roadbed), lik sleeper and jordne phant (laying sleepers and joining the rails), culvert phant (installing culverts) and pul phant (building bridges). Colonel Kishore Narsingh Rana was put in charge of the sleeper and rail section, while Colonel Dilli Jung Thapa, an engineer at Ghar Kaj Adda, also was involved. The Motor Railway was completed by the end of 1933. In the beginning, the railway’s small wagons may have been pulled and pushed by men and bullocks. However, in 1938 a British railway manufacturer sent Nepal a four-wheel, 5½ ton, 2-foot narrow-gauge diesel-powered locomotive with mechanical transmission, hence the name motor railway. Read also: <a href="https://nepalitimes.com/latest/nepal-railways-janakpur-test-drive?fb_comment_id=3554227181262227_4263866616964943">Nepal Railways Janakpur test drive</a> Leaving Matatirtha, the trains passed Satungal, Naikap, the Bishnudevi Temple, crossed an iron bridge over Balkhu Khola, then to Ghattepakha, Sunagau, through what is now a section of Kuleshwor (‘Lik Marg’) to the Customs Office at Teku.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9.jpg" data-media-id="editor_15" data-image-id="20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9" data-rendition-name="original" width="2000" height="1333" loading="lazy" alt="railways in Nepal"> <figcaption>Lik Marg in Kuleswor, the former route of the Motor Trolley Railway. Photo: DANIEL W EDWARDS</figcaption> </figure>  In 1945, Motor Trolley had four engines, but spare parts was badly needed. The charge for transporting one maund (about 40kg) of cargo from Matatirtha to Teku was 50 paisa. Even though the trains ran slowly and only for a short distance, <a href="https://nepalitimes.com/news/fatalism-and-fatalities">accidents were not unknown</a>. A train loaded with rice, salt and cotton derailed on a curve in July 1946, and two railway employees were crushed under the cars and killed, five others were injured. Besides the driver and a brakeman, guards rode the trains to prevent theft of goods.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060.jpg" data-media-id="editor_17" data-image-id="20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>The author by the remains of the Balkhu Khola bridge built in 1932 with American steel. Photo: JEEVAN NEPAL</figcaption> </figure>  By 1953, government budget estimates indicated the Motor Railway would break even with an income of Rs70,000 against Rs71,000 in expenditure. It appears the railway stopped service around 1957 with the opening of the Raj Path and the extension of the ropeway from Matatirtha to Bhansar Adda. Bent steel beams of the bridge across Balkhu Khola and two plaques recovered from the river a few years ago are the only remains of this railway today. Photos of the Motor Trolley Railway in operation are hard to come by.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b.jpg" data-media-id="editor_18" data-image-id="20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b" data-rendition-name="original" width="5189" height="1979" loading="lazy" alt="railways in Nepal"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The Kosi Project Railway (KPR) As early as 1941, India and Nepal considered building a dam on<a href="https://nepalitimes.com/here-now/the-kosi-s-sorrow-and-scope"> the Kosi River</a> to prevent destructive floods caused by <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">monsoon rains</a>. Floods in 1950 inundated 500 villages in Bihar and left 500,000 people homeless. The two governments signed an agreement in 1954 to build a barrage on the Kosi, and King Mahendra and Prime Minister Nehru laid the foundation stone in April 1959. To transport stones from a quarry near Dharan to use in mixing concrete at the construction site, the Indian government, in charge of building the barrage, made plans to build a narrow-gauge railway linking Bihar and its border town of Bhimnagar with Nepal’s settlements at Chakraghatti, Chatra and Ghopa, the outskirts of Dharan.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7.jpg" data-media-id="editor_21" data-image-id="20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7" data-rendition-name="original" width="4011" height="2645" loading="lazy" alt="Nepal's railways"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The section of the KPR in Nepal totaled 66km — the country’s longest railway to date. The stations south of Chakraghatti were Rajabas, Maduhuwan, Kushaha, Haripur and Bhantabari. The line built, operated and owned by the Indian Government, was opened in 1958 and known locally as Dhunge (stone) Rail. Procuring locomotives, wagons and other materials was a challenge. India’s Railway Board searched the country for old 41 lb rails, and located steam engines, most built around 1910, in poor condition, and stored in ‘retirement’. These decrepit locomotives were later cannibalised for parts to keep the remaining engines running, and six newer locomotives built in Yugoslavia were sent to the KPR in 1960 to prevent the railway from shutting down and halting construction of the barrage.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b.bmp" data-media-id="editor_22" data-image-id="20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b" data-rendition-name="original" width="3171" height="2069" loading="lazy" alt="Nepal's railways"> <figcaption>KPR locomotives, water tank and staff at Chakraghatti in Nepal. Photo: JOHN BENSON</figcaption> </figure>  Used bogie-wagons (gondolas) came from <a href="https://nepalitimes.com/here-now/india-nepal-rail-diplomacy">Indian railways</a> that had been converted to metre-gauge, others were manufactured in Muzaffarpur without couplers due to the non-availability of steel. A hundred new wagons arrived from Japan, but only half could be put in service, as couplers from the other 50 were removed and attached to the Muzaffarpur wagons. This smorgasbord of equipment kept shop mechanics and work crews busy, but now-abandoned railways in Nepal always operated under less-than-ideal conditions. Although the purpose of the KPR was to transport gravel, stones and boulders to the site of the barrage, photographs show people riding in loaded wagons. Excluding Dharan, there was no bus service through the wild animal infested jungle between Dharan and Chakraghatti or along the dusty paths linking other small villages on the KPR, so patient locals sat in wagons at Dharan, waiting perhaps for hours for trains to depart.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6.jpg" data-media-id="editor_24" data-image-id="20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6" data-rendition-name="original" width="3965" height="2659" loading="lazy" alt="railways in Nepal"> <figcaption>Ticketless riders on a train of gravel and stones in the forest between Dharan and Chakragatti in 1966. Photo: JOHN BENSON</figcaption> </figure>  Sons of former railway workers in Chakraghatti say that there were no fixed schedules, three or four trains ran both ways daily in the early 1960s. Southbound trains carried gravel, stones and boulders, while northbound trains would carry coal, cement and provisions, including sacks of coins to pay the workers. Trains even ran at night, and the crews worked long hours. Workers received free housing in project-built tenements but had to buy food supplies and items for personal use. The Babu Saheb or the superintendent lived at Chakraghatti, and at one time supervised more than 1,000 employees, nearly all of them from India. The barrage was completed in 1964, but by 1970, the Kosi Project Railway had passed into history. Daniel W Edwards was a Peace Corps volunteer in 1966 and is the author of several books on Nepal.

Nepal’s five little railways

Turkish Airlines is official airline partner for the second edition of the Vatsalya Everest Women’s Volleyball League (EWV). The league, scheduled for 5-13 September, will take place in Pokhara and feature 18 international players alongside elite Nepali volleyball talent. The agreement was signed by Turkish General Manager Serkan Başar, and EWV CEO Snevy Chapagain. “Turkish Airlines’ support ensures a seamless journey and adds immense prestige to the league’s goal of women’s empowerment through sports as well as the agenda of sports tourism,” said Chapagain. “We are thrilled to partner with Vatsalya Everest Women’s Volleyball League as the official airline. With this association, we aim to support women role models in sports. We believe this association will connect countries to Nepali volleyball,” remarked Basar.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4.jpg" data-media-id="editor_0" data-image-id="20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4" data-rendition-name="original" width="1920" height="1280" loading="lazy" alt="Turkish"> </figure>

Turkish to sponsor women’s volleyball league

India and China have a long-standing border dispute along their Himalayan border which has erupted in violent skirmishes. But Indian and Chinese officials last week agreed to ignore Nepal’s own border dispute with India to facilitate trade. The Indian Ministry of External Affairs this week flatly rubbished <a href="https://nepalitimes.com/editorial/territorialism">Nepal’s territorial claims</a> to the Lipulek Pass and the Kalapani Region, including Limpiyadhura, which Nepal considers as the source of the Mahakali River that forms Nepal’s western border with India. The latest episode in this dispute has come as Sino-Indian relations have thawed after US President Donald Trump slapped <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">sanctions on Indian exports</a>. The joint communiqué in Beijing said India and China had agreed to resume their border trade through the Nathu La, Sipki La and Lipulek during Chinese foreign minister Wang Yi’s visit to New Delhi. Lipulek is a pass 10 km north-east of <a href="https://nepalitimes.com/news/there-is-precedent-to-settling-kalapani">Kalapani</a> which has been disputed ever since the Survey of India published its 1879 map, where the source of the Mahakali was suddenly shifted from Limpiyadhura to Lipulek.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd.jpg" data-media-id="editor_3" data-image-id="20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd" data-rendition-name="original" width="2000" height="2083" loading="lazy" alt="Lipulek dispute explainer"> </figure>  This tributary of the Mahakali was called the Kali on this map, and is a fordable tributary and not the main channel of the border river. The main Kali River was renamed Kuti Yangdi, and this happened while the British were still in India presumably to gain access to the Lipulek in contravention of the 1816 <a href="https://nepalitimes.com/banner/borderline-disorder">Sugauli Treaty</a>.&nbsp; This subterfuge continued even after India gained independence in 1947. Nepal has maintained that the main channel of the Kali is the border as per the 1816 treaty, when Nepal lost a third of its territory to British India. It is all well and good that India and China are now friendly enough to <a href="https://archive.nepalitimes.com/news.php?id=19447">open border trade</a> routes, but it should not be in violation of Nepal’s territorial integrity. Nepal should be called for diplomatic and political negotiations regarding the Lipulek pass and the Kalapani region comprising Limpiyadhura.&nbsp; Read also: <a href="https://nepalitimes.com/opinion/comment/when-xi-meets-modi-and-oli">When Xi meets Modi and Oli</a>, Kanak Mani Dixit China and India, but especially the latter, should invite Nepal to discuss these issues and iron out the disputes based on facts and evidence and maps. Nepal had sent seven diplomatic notes to India and three to China so far regarding the Lipulek and Kalapani. India has not responded to any of them. China replied once saying that Nepal and India should sort out their border disputes first before voicing their opinions. Nepal welcomes the recent talks between India and China that it hopes will positively impact on settling border disputes that are mostly stalled since the 1962 Sino-Indian war, the 73-day military standoff over the disputed Doklam region between China and Bhutan, and the 2020 Galwan clash in Ladakh. Nepal’s two large neighbours seem to have come to their senses and realised that it is in their interest to collaborate rather than confront each other when President <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump is acting erratically</a> with threats of sanctions and tariffs.&nbsp; Prime Minister K P Oli should bring up Nepal’s grave concerns about the Lipulek during his state visit to India next month when he will meet Prime Minister Narendra Modi in Bodh Gaya. The two are also expected to meet next week at the Shanghai Cooperation Organisation summit in Tianjin when Chinese President Xi Jinping will also be present. But even before that Nepal should send diplomatic notes to both the Indian and the Chinese governments regarding their agreement to resume border trade through the Lipulek.&nbsp; Here is a timeline of the developments regarding the Lipulek: Sino-Indian Agreement of 1954 This 8-year Agreement on Trade and Exchange between Tibet and India was signed in Peking on 29 April, 1954 by the Chinese Vice-Foreign Minister Chang Han Fu and the Indian Ambassador Nedyam Raghavan.&nbsp; There was no explicit mention on the border settlements either on the Line of Actual Control (LAC) or on Ladakh, although trade and pilgrimage through Lipulek and other 5 passes (Sipki La, Mana Pass, Niti Pass, Kungri Bingri Pass and Dharma Pass) were agreed upon.&nbsp; Trade between Uttar Pradesh state and the Tibet Autonomous Region was through ‘border &nbsp;point of the agreement states: ‘With a view to facilitating the visits of persons engaged in border trade and the exchange of commodities and means of transportation, (India and China) have decided that Lipulek (Qiangla) be the border pass for the entrance and exit of the said persons, commodities and means of transportation from the two sides.’ The agreement expired on 6 June 1962 during the Sino-Indian war, and the two sides did not renew it. Bilateral ties started to normalise only in the 1990s with the Indian decision in 1988 to abandon its policy of settling ‘territorial issue’ for ‘normalisation of relations’. India There was no reaction from Nepal to the 1954 agreement since Nepal did not have diplomatic relations with China yet at the time. Sino-Indian Agreement of 2005 The Political Parameters and the Guiding Principles for the Settlement of the Sino-Indian Boundary Question is detailed in 11 Articles, which outline the steps to be taken for a Peaceful and Tranquil Border. The agreement was a direct outcome of the Special Representatives mechanism that had been set up through a 2003 agreement. It also incorporated the Confidence Building Measures in Military Field along the Line of Actual Control (LAC) in the Sino-Indian Border Areas signed in 1996.&nbsp; A protocol on Modalities for the Implementation of Confidence Building Measures in the Military Field along the Line of Actual Control in the India-China Border Areas signed during Chinese Premier Wen Jiabao’s India visit, which stated in Clause 2 of Article 5: ‘Both sides agree to extend in principle to expand the mechanism of border meeting points to include Kibithu Dhamal in the Eastern Sector and Lipulek Pass (Qing La) in the Middle Sector. The precise locations of these border meeting points will be decided upon mutual consultations.’ Nepal’s Foreign Ministry issued a statement in 2005 stating that Nepal had asked China about the issue and the Chinese Embassy clarified that the agreement had nothing to do with Kalapani. This was perhaps the first time that Nepal had objected to the Sino-Indian agreement on Lipulek. King Gyanendra had staged a coup d’état on 1 February 2005, just two months prior to this agreement. The Nepali press voiced criticism of China in particular for disregarding the country’s sentiment.&nbsp; Sino-Indian Agreement of 2015 India and China signed several documents during the state visit of Chinese President XI Jinping to India on 18 September 2011. Number one on the list was: ’Opening a New Route for Indian Pilgrimage (Kailash Mansarovar Yatra) to the Tibet Autonomous Region of the People’s Republic of China’.&nbsp; The Indian foreign ministry stated: ‘The MoU provides for conducting the annual Kailash Mansarovar Yatra through Nathula Pass in Sikkim in addition to the existing Lipulek Pass in Uttarakhand’. On May 15, 2015, China and India issued a Joint Statement during Indian Prime Minister Narendra Modi’s visit to China. Point 28 under the ‘Trans-border Cooperation’, states that the two sides agreed to ‘hold negotiation on augmenting the list of trades commodities, and expand border trade at Nathu La, Quingla/Lipulek Pass and Sipki La Pass’. Nepal’s objection to the 2015 agreement was stronger than in 2005. Prime Minister Sushil Koirala called up Narendra Modi to express Nepal’s displeasure It was not until 2020 that Nepal’s Foreign Minister disclosed that ‘Nepal had expressed its disagreement in 2015 through separate diplomatic notes addressed to the governments of both India and China … including Lipulek Pass as a bilateral trade route without Nepal’s consent.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea.jpg" data-media-id="editor_8" data-image-id="20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea" data-rendition-name="original" width="1108" height="1550" loading="lazy" alt="Lipulek dispute explainer"> </figure>  The new political map of India published by the Survey of India in November 2019 that incorporated areas east of the Kali River including Kalapani as Indian territory sparked renewed public, and political, attention to the Mahakali dispute. The Nepal government then countered by formally approving the publication of the new Political and Administrative Map of Nepal including all territories lying to the east of the Mahakali River on May 18, 2020. In June, the House of Representatives unanimously endorsed the second amendment to the Constitution of Nepal to update the country’s new political map in the national emblem. Sino-Indian Consensus of 2024 A 6-point Consensus on Peace and Tranquility on the Line of Actual Control (LAC) was agreed on December 18, 2024 between the Special Representative of the People’s Republic of China, Wang Yi, and the Special Representative of the Republic of India, Ajit Doval.&nbsp; India has not denied that this is a consensus, while China made it clear that this was not a Joint Statement. This Consensus is in line with the 2005 agreement, and was agreed during the 23rd round of the Special Representatives talks held after a gap of five years aimed at restoring bilateral ties frozen because of the military standoff in Ladakh. The agreement included: cross-border communication and cooperation, promoting the resumption of pilgrimages by Indians to Xizang, cooperation on crossborder rivers, and trade at the Nathu La Pass. Nepal made no reaction to the statement despite Lipulek being the pilgrimage route for Mansarovar and Kailash.&nbsp; Prabhakar Sharma is a construction engineer and an international border expert who has worked as a survey engineer for the Cameroon-Nigeria border demarcation by the United Nations.

Lipulek dispute explainer

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>