<img width="2000" height="2083" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131148/637239939c7e80680e0c73edjpeg.jpg" alt=""/>Two books released this week deal prominently with the Kalapani border dispute between Nepal and India, and both eschew jingoism for historical records and present pragmatic ways to resolve this bilateral irritant.In National Security and the State: A Focus on Nepal, retired Brig-Gen Keshar Bahadur Bhandari of the Nepal Army uses Kalapani as bookends in his foreword and epilogue. Now more than ever before, he says, Nepal needs to devise and follow a national security doctrine if it is to survive between the world’s two most populous countries.In Nepal-India Border Disputes: Mahakali and Susta edited by Pitamber Sharma, a slew of cartographers, geographers, historians and even a hydrologist pore into colonial era maps and treaties to explore why Kalapani-Lipulekh-Limpiyadhura became disputed in the first place.Read together, the two books present ideas about how Nepal can navigate the treacherous geopolitics of being a country of 30 million squeezed between two Goliaths on either side with 2.6 billion peoples.Nepal’s founding king Prithvi Narayan Shah already had a national security policy that he set forth in his Dibya Upadesh 250 years ago with the ‘Yam Doctrine’. The only difference is that today Nepal is a tuber betwixt three boulders, not just two.The most direct impact of this was felt in the last three years when Nepal’s politicians went at each other with hammers and tongs, weaponising the MCC, and in the process offending all three powers: the United States, China, India.Bhandari’s recommendation is that Nepal has no option but to follow another one of king Prithvi’s guiding security principles: ‘Jai katak nagarnu, jhikikatak garnu’ (Don’t provoke needlessly, but be ready to defend.)Reading the historical recaps in National Security and the State, it becomes clear that the threat to Nepal’s national security since the Gurkha Conquest in 1769, and especially after 1816, was not so much from belligerent neighbours, but from within the royal court in Kathmandu itself.The royal families and their courtiers were entangled in endless conspiracies, vengeance and violence. The constant back-stabbing periodically erupted in ‘front-stabbing’ in the Bhandarkhal and Kot massacres, and even the murder of the royals in 2001.The Shah and Rana dynasties were historically prone to feuds over succession, and some of this was because of the promiscuity of monarchs who begat progeny from multiple queens and concubines. Courtiers and advisers took sides, and rival regent queens appealed for support from the East India Company via the British Resident.In that respect, contemporary politics in the Federal Democratic Republic of Nepal is not much different, as politically promiscuous leaders openly seek patronage of powerful actors in Delhi or Beijing in their in-house power struggles.Read also: <a href="https://www.nepalitimes.com/latest/the-india-nepal-china-geopolitical-tri-junction/" target="_blank" rel="noopener noreferrer">The India-Nepal-China geopolitical tri-junction</a>, Kunda DixitBhandari compares the security doctrine of other small states like Israel which punch above their weight, but says also-landlocked Mongolia could be a more appropriate model for Nepal: ‘What China is to Mongolia, India is to Nepal … what Russia is to Mongolia, China is to Nepal.’Unlike Nepal, which is vulnerable due to its overwhelming economic dependence on India, Mongolia has created a ‘third neighbour’ to boost its economic security, the author argues. <figure><img width="1280" height="719" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131148/637239969c7e80680e0c73eejpeg.jpg" alt=""><figcaption> </figcaption></figure>Nepal is not a ‘small’ country, it is just small compared to its giant neighbours. When it became the oldest nation state in South Asia two-and-half centuries ago, there were only 22 other countries in the world, and today it is the 40th most populous in the world. Bhandari dissects the term ‘nation-state’, and puts forth the argument that because of its ethnic diversity Nepal is actually a ‘state-nation’. As someone who was also involved in peacekeeping operations in Afghanistan, the author wants steps to be taken to prevent potential ethno-cultural conflict in Nepal. Although there are chapters on the Nepal Army, and especially its conduct during the Maoist insurgency, the book expands the definition of national security beyond the military to also refer to political stability, economic security, cyber security, human security and even climate security. The reader could wonder why Nepal even needs a national army when it may not be much of a deterrence against foreign invasion. Like Costa Rica, it could free up a chunk of its budget to resolve precursors to internal conflict like social injustice, inequity and poor governance. National Security and the State is a largely objective assessment of Nepal’s security concerns, but on some issues Brig-Gen Bhandari does take a stance. He postulates that Nepal might still be a monarchy if the Comprehensive Peace Accord of 2006 was between the Maoists and the Royal Nepal Army, instead of with the 7-party Alliance. He also has strong views on regulating the 1,880km India-Nepal open border because ‘it has done more bad and good to Nepal … exacerbating security problems’. He also maintains that secularism was covertly added into the 2015 Constitution, and that: ‘The cause of Hindu religion would protect many of Nepal’s national security interests.’ Going by the intolerance and polarity in India today, Nepal may have to think twice about importing insecurity from the South. The ‘soft power’ of religion may not do much to firm up Nepal’s ‘soft state’. The border dispute with India is one of Nepal’s major security concerns, and Nepal-India Border Disputes: Mahakali and Susta tries to put the matter to rest with chapters by Nepali experts including geographer Mangal Siddhi Manandhar, former government secretary Dwarika Nath Dhungel, geodetic engineer Prabhakar Sharma, and historian Tri Ratna Manandhar. As geography professor and former head of the National Planning Commission Pitamber Sharma concludes in his overview, ‘The boundary issues between Nepal and India can be settled only by the strict obedience of the Sugauli Treaty.’ Read also: <a href="https://www.nepalitimes.com/editorial/territorialism/" target="_blank" rel="noopener noreferrer">Territorialism</a>, Editorial That treaty between the British East India Company and the Gorkha Empire signed in 1816 shrank Nepal to territory west of the Mechi and east of the Mahakali rivers. But the treaty did not have a map, and it was left to interpretation which was the main flow of the Mahakali at its upper reaches in the tri-junction between Nepal, India and China. This compilation makes a case for Nepal’s claim, but does so without falling into the nationalistic trap, presenting an objective analysis of why and where the boundary was changed. The conclusion: disputes over the river borders at Kalapani and Susta are a legacy of British India. As Dwarika Dhungel points out in his chapter, early maps showed the Kali River originating in Limpiyadhura but the British later found that there was a much easier trade route to Tibet for the import of valuable shatoosh baby antelope wool along a tributary to Lipu Pass. They then surreptitiously manipulated their survey maps to first cover up the Kali (Kuti Yangdi) and then show Lipu Khola as the main river, shifting the border eastwards. Dhungel notes: ‘How a lesser stream could be recognised as the main branch of the Kali is beyond any logic.’ If trade was the main preoccupation for Britain, for independent India it was the strategic importance of Lipu Pass — especially after the border war with China in 1962. King Mahendra allowed the Indian Army to ‘temporarily’ stay in Kalapani, and it appears to have been historical Nepali indifference by local authorities as well as faraway Kathmandu that allowed the Indians to stay put. With Susta, the reason for the dispute is the shifting main channel of the Gandak westwards, and came to the fore in the 1960s. Nearly 40sq km of what was once Nepali territory now lies in India if one is to accept the joint Nepal-Britain Rozar Martin maps of 1817. It is clear that colonial Britain pushed the Kalapani boundary for its trade interest and left India to deal with the consequences with Nepal, which it is doing to this day. The border issue is then used by politicians in both Kathmandu and New Delhi to wave the populist flag from time to time. China’s past border agreements with India on Lipulekh have shown that Nepal cannot rely on Beijing for support.   In the epilogue to National Security and the State, Brig-Gen Bhandari urges Nepali leaders to use ‘proper lobbying and persuasive pressure’ to either make Kalapani a peace buffer, or to swap it, as example, for a permanent highway corridor from the southeast tip of Nepal to Bangladesh through Indian territory. His advice: ‘Since a small state cannot change its neighbours, it has to learn to live with them … more so Nepal can bring the two neighbours with diverse political and sociocultural values closer for a common and great economic interest.’   Read also: <a href="https://www.nepalitimes.com/latest/nepal-needs-intelligent-intelligence/">Nepal needs intelligent intelligence</a>, Dipak Gurung National Security and the State: A Focus on NepalBy Keshar Bahadur BhandariNepa-laya, 2022426 pages, Rs 995Also available through Thuprai and Amazon <img width="1000" height="1178" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131148/637239999c7e80680e0c73efjpeg.jpg" alt=""><img width="640" height="754" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131148/6372399b9c7e80680e0c73f0jpeg.jpg" alt=""> Nepal-India Border Disputes: Mahakali and SustaEdited With an Introduction by Pitamber SharmaMandala Book Point, 2022192 pages, Rs 1,595Read also: <a href="https://www.nepalitimes.com/banner/stories-of-nepals-summiteers/">Stories of Nepal’s summiteers</a>, Ashish Dhakal

Kunda Dixit

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A survival strategy for Nepal

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107101156/6368d6819c7e80680e03148ajpeg.jpg" alt="" width="1400" height="1254"/><figcaption>Bhanu Bhattarai</figcaption></figure>Across the world, from the Philippines to the United States, and in Central European countries like Hungary and Poland, we have seen worrying signs of democratic reversal. Even in open societies like the UK, Germany, France and India there has been a recent ascendance of the racist right.Extremism and populism have taken centre-stage as demagogues whip up xenophobia and bigotry to get elected in democracies that are abandoning a rule-based society. They are systematically gagging the free press,<a href="http://archive.nepalitimes.com/news.php?id=18837#.Wv1qyu6FPIU" target="_blank" rel="noopener"> using the power of the social web</a> to spread hate and lies, and encouraging violent extremism. Hungary’s Viktor Orbán boastfully calls his country an ‘illiberal democracy’. Using the Trump administration as a shield, Israel is mowing down Palestinians. Cambodia has just sold its last independent newspaper to a Malaysian tycoon.The decline is not isolated, and it is not a temporary occurrence. The Freedom in the World Report 2018 notes that political freedom is in retreat across the globe. More than 70 countries have seen declines in political and civil rights in recent years, and there were gains in only half that number of nations.The only recent silver lining is Malaysia, where the people last week voted out a brazenly corrupt and openly racist cabal, even though the electoral system had been rigged, and the judiciary coopted, to bring back 92-year-old Mahathir Mohamad.Read also: <a href="https://www.nepalitimes.com/?p=6146&amp;preview=true" target="_blank" rel="noopener"> The crow and the scarecrow</a>, Om Astha RaiHopefully, Malaysia’s example will spread, and send a message to those struggling against despots: sooner or later democracy will prevail.Even so, in many Asian countries today there is open admiration for China’s economic growth and the Singapore miracle. This has led to a growing attraction for strong-man rule. Political and civil liberties are seen to be putting the cart before the horse, and freedom is seen as a luxury that is keeping people poor. The emphasis is on economic and cultural rights, and citizens are asked to <a href="http://archive.nepalitimes.com/article/nation/The-right%20-to-have-rights,2656" target="_blank" rel="noopener">give up their basic freedoms while waiting to prosper</a>. The state’s priority has become national security, fighting terrorism, stopping migration, to ensure stability and prosperity.All this is now getting to sound disturbingly familiar in Nepal where the slogan of the ruling coalition that was elected last year is ‘<a href="http://archive.nepalitimes.com/article/nation/into-a-state-of-uncertain-stability-nepal,4068" target="_blank" rel="noopener">prosperity through stability</a>’. The alliance is made up of a <a href="http://archive.nepalitimes.com/article/nation/a-two-party-state,3968" target="_blank" rel="noopener">moderate leftist party</a> named after Marx and Lenin which on Thursday, merged with former communist rebels who are inspired by Mao.The UML changed its spots to espouse the People’s Multi-party Democracy line, but the CPN-MC did not convincingly abandon its <a href="http://archive.nepalitimes.com/news.php?id=6258#.Wv100-6FPIU" target="_blank" rel="noopener">ideology of revolutionary violence</a>. It wanted the <a href="http://archive.nepalitimes.com/article/nation/the-spark-that-lit-the-Maoist-revolution,2870" target="_blank" rel="noopener">People’s War</a> to be glorified and enshrined in the guiding principles of the new Nepal Communist Party. There is no move towards <a href="https://www.nepalitimes.com/here-now/the-struggle-for-transitional-justice/" target="_blank" rel="noopener">transitional justice</a>, <a href="http://archive.nepalitimes.com/article/editorial/justice-delayed-justice-denied-transitional-justice,3556" target="_blank" rel="noopener">or to say sorry</a>.Read Also: <a href="http://archive.nepalitimes.com/article/nation/a-trump-world-us-nepal,3359" target="_blank" rel="noopener">A Trump world</a>, Om Astha RaiRecently, we saw how easily both parties as well as the NC, now in the opposition, were held hostage by their own appointee to the anti-corruption commission as he terrorised the press and dismantled the rule of law for three years. The warning to us is that <a href="http://archive.nepalitimes.com/regular-columns/Legalese/The-charade-of-impeachment,801" target="_blank" rel="noopener">Lokman Singh Karki</a> can easily happen again.Communists are guided by the principle of ‘democratic centralism’ which is an antithesis to federalism and devolution. And the ruling coalition is doing just that: centralising power in the PMO. The recently released draft National Integrity Policy, while seeking to lay legitimate ground rules for the conduct of public officials and outside agencies, has some disturbing provisions.As we report in this edition, the restrictions appear to be guided by the perception of aggressive proselytisation and donor funding for indigenous and excluded groups during the Constitution-drafting process.Read Also: <a href="http://archive.nepalitimes.com/regular-columns/On-the-way-up/who-teaches-democracy,1020" target="_blank" rel="noopener">Who teaches us democracy?</a>, Kanak Mani DixitThere may have been a need to regulate the proliferation of NGOs, and the government does need to keep track of where <a href="http://archive.nepalitimes.com/regular-columns/half-full/capacity-for-development-half-full,1110" target="_blank" rel="noopener">outside funds go</a>. But some of the points in the draft are so open-ended that they seem intended for control rather than regulation. The government now wants only foreign assistance in ‘hardware’ and not ‘software’, and is turning away aid on anything to do with inclusion, human rights and democracy.Given the spread of illiberal democracy around the world, there is reason to be worried that ‘stability and prosperity’ could be a euphemism for control, and silencing dissent.Read Also: <a href="http://archive.nepalitimes.com/article/nation/The-turning-point-war-nepal,3986" target="_blank" rel="noopener">The turning point</a>, Kunda Dixit

Illiberal ills

Nepal has shut down dozens of social media platforms in a move that is widely seen as an effort to tax the revenue they generate in the country, and to control content critical of government. The sites were blocked as of midnight on Thursday, 4 September and affects all Meta products including WhatsApp and Messenger, Threads, and others. Although YouTube, Google and X are also on the government’s list, they were still working as of Friday midday.&nbsp; The government says it took the action after repeated warnings to the platforms to open offices in Nepal, a Cabinet decision last month setting a deadline, as well as a 17 August Supreme Court ruling also requiring them to register and pay requisite taxes. However, the Bill cited in the ban, ‘The Operation, Use, and Regulation of Social Media in Nepal’ has not yet been passed by Parliament. Some social media platforms which were already paying taxes in Nepal even though they are not officially registered, have also been blocked. The move is the latest in <a href="https://nepalitimes.com/news/big-beautiful-bills" target="_blank">a slew of draft legislations</a> designed to undermine Nepal’s open society. A Bill amending the Print and Publications Act would allow district bureaucrats to shut down media. Another draft Bill would allow political appointees to head a new Media Council with the power to revoke the licenses of journalists.&nbsp; A counter-intelligence Bill would let just about anyone in government to arbitrarily tap phones, read emails and trail citizens. On Wednesday the government announced new immigration requirements that would allow it to track the movement of all foreigners in the country. Yet another draft Bill has been set to Parliament to dissolve the <a href="https://archive.nepalitimes.com/news.php?id=10675" target="_blank">Social Welfare Council (SWC)</a> and move registration and monitoring of non-governmental organisations, nonprofits and charities to the Ministry of Social Welfare. Seen in this light, the blockage of social media platforms this week is seen as the latest government attempt to constrict freedom of press. Nepal is one of the few remaining open societies in Asia, and now appears to be drifting towards authoritarianism. The government’s sudden shutdown of social media has been greeted with howls of protest on platforms that still remain open, like Viber and TikTok, as well as in Nepal’s mainstream press. Even senior members of the ruling UML-NC coalition have sharply criticised the move, asking if the government is trying to “turn Nepal into North Korea”.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025090508098_a2ab330e403e8418a7006cd5e915607382628dd6984524332bf7b99c74743656.jpg" data-media-id="editor_2" data-image-id="2025090508098_a2ab330e403e8418a7006cd5e915607382628dd6984524332bf7b99c74743656" data-rendition-name="original" width="4280" height="5187" loading="lazy" alt="social media ban in Nepal"> </figure>  The Regional Director of the New York-based Committee to Protect Journalists (CPJ) Beh Lih Yi said in a statement: ‘Nepal’s sweeping ban on social media sets a dangerous precedent for press freedom. Blocking online news platforms vital to journalists will undermine reporting and the public’s right to information. The government must immediately rescind this order and restore access to social media platforms, which are essential tools for exercising press freedom.’ Besides undermining press freedom, blocking social media platforms will also hurt commerce and the economy since so many small and medium business trade through Instagram, Facebook and other platforms. Nepal’s vibrant social media has also been a boost or citizens to assert identity, build solidarity against injustice and play an adversarial role when the mainstream media does not do it. Social media platforms have also become the tenuous link for Nepali families scattered across the world to keep in touch with each other — its importance growing with the increasing size of the diaspora. The government wants social media platforms to register, pay taxes and remove posts on their sites that ‘undermine the national interest and Nepal’s territorial integrity, disturb social and religious harmony’.&nbsp; In response, rights activists have said while there is need for the government to regulate extreme content and hate speech, officials appear to be more intent on clamping down on free speech and trying to force platforms to share the revenue. On Friday, the government had allowed WhatsApp back online, but there were reports that it had instructed the Nepal Telecommunication Authority (NTA) to instruct mobile and internet service providers to block by Friday night all platforms, including Facebook, Instagram, Messenger, WhatsApp, X (Twitter), YouTube, LinkedIn, Reddit, Threads, Snapchat, Pinterest, Signal, Clubhouse, Rumble.&nbsp; Platforms that have registered and are allowed include TikTok, Viber, Nimbuzz, Popo Live, WeTalk, Global Diary and the Nepali portal Hamro Patro. TikTok was banned last year for ‘disturbing social harmony’ and it was lifted after the platform registered its office in Nepal. But even while it was banned, many users simply switched to VPN. Telegram was also banned for ‘financial crimes’ and it has since also been allowed back. NTA officials confirmed that some Asia-Pacific regional offices of platforms, including Meta had been in touch overnight inquiring about the registration process.&nbsp; Nepal is not alone in regulating social media. China bans most Western platforms, Russia and Turkey regulate their and require platforms to locate their data servers in the country. Gulf countries allow social media but keep a tight control on dissent.&nbsp; Experts have said even the government will not dare close down YouTube since so many Nepali individuals and companies make money with posts on that platform, and closing it would also impact on Google and Gmail. Facebook had also just launched a monetisation scheme for videos and reels, and Nepalis uploading content would lose revenue.&nbsp; Blocking the platforms has already hit content creators, influencers and cut small businesses from reaching customers. A survey of social media use in Nepal by Sharecast Initiative showed that 94% of those with smart phones used YouTube, followed by Facebook (92%) while TikTok was in the 50-60% range. X and Instagram were in the single digits. A YouTube ban will also hurt the mainstream media since up to 20% of the revenue of Nepal’s main tv channels came through YouTube. Some 11.1 million Nepalis watch YouTube content every day, the survey showed. ‘For global giants like Meta or Google, Nepal is a small market, and they may not even flinch — but for millions of Nepalis, these platforms are central to daily life, livelihoods, and connections across the world,’ wrote AI consultant Naresh Newar in a LinkedIn post. Some experts said the government’s sweeping ban on social media networks was untenable and the government would be forced to rollback sooner or later. Said editor Shiva Gaunle: “The platforms had given citizens a voice and broken the monopoly of the government, legislators, the courts and journalists over public opinion. This is an effort to reassert that monopoly, but Nepal can never be turned into a North Korea.”

Protest grows against Nepal’s social media ban

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

30 years after Baby Arun

<a href="https://www.youtube.com/watch?v=x2fZXyjsE28" target="_blank">Yog Narendra Malla</a> became king at age 18, and ruled Patan from 1684-1705 — his reign marked by a cultural and architectural renaissance of the city state. He put up a statue of himself in the palace square with a little bronze bird sitting on the guardian serpent above his head. It is said he told his subjects that he would look after their welfare till the day the bird flew off. During<a href="https://nepalitimes.com/here-now/lessons-not-learned-from-2015-o2etq6zu"> the 2015 earthquake</a>, the pedestal collapsed and the statue was damaged. The bird was lost, only to be located in a pile of debris and reinstated when the <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/piece-by-piece-patan-darbar-square-reconstruction,3782" target="_blank">statue was consecrated</a> two years later. <div class="embed-block"><iframe width="560" height="315" src="https://www.youtube.com/embed/x2fZXyjsE28?si=jYfIb4p6zCLXYQ1T" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div> History remembers Yog Narendra Malla as a wise king, but like most<a href="https://nepalitimes.com/here-now/preserving-king-birendra-s-family-home"> royalty of the day</a>, he had a weakness for women. He is supposed to have consorted with 30 queens and numerous concubines. At least 33 of them self-immolated themselves on the king's funeral pyre when he died, adhering to the prevailing <a href="https://archive.nepalitimes.com/article/review/Jhola,947">practice of sati</a>. When Yog Narendra Malla’s favourite queen found out that he was carrying on with yet another woman, she got the local community of the Kwelachhi neighbourhood to stage a shadow sex play to quite literally expose his unfaithfulness. Actors enacted the explicit exploits of the king and his mistress, a bright butter lamp projecting the moving shadows of their lovemaking on a thin white drape to entertain those gathered in the square below. The queen made sure that the show was designed to face the home of the king’s paramour to shame them both. She also paid for a group to chant a bhajan with lyrics that ridiculed the king’s extramarital affair. The Jhyalcha Guthi community trust that the queen set up three-and-half century ago is still active to this day, and performs the annual shadow play in the same building in Kwelachhi the day before <a href="https://nepalitimes.com/banner/the-legend-behind-the-myth-of-indra-jatra">Indra Jatra </a>every year. This year’s show is on Friday evening, 5 September. The opening lines of the chants that accompany the play are the same words approved by the queen all those years ago: “Raja Yog Narendra ya aparadh…” (King Yog Narendra’s crime…) The community leader of the Kwelachhi neighbourhood, 62-year-old Baburaja Awale, explains the importance of the event: “This Jhyalcha is our<a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/saving-the-intangible,3303"> intangible heritage</a> and oral history. We do not have a written format, it has been passed down from generation to generation. Every word of the bhajan is the story of King Yog Narendra Malla.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250904070952_249e85b32cbd99bb8515151557e0ec1a65d44a34ef1aacabaaeb469622d12664.jpg" data-media-id="editor_8" data-image-id="20250904070952_249e85b32cbd99bb8515151557e0ec1a65d44a34ef1aacabaaeb469622d12664" data-rendition-name="original" width="1750" height="1167" loading="lazy" alt="Sex and the city of Patan"> <figcaption>The statue of Yog Narendra Malla being reinstated after it toppled in the 2015 earthquake. Photo: GOPEN RAI/ NEPALI TIMES ARCHIVE</figcaption> </figure>  Jhyalcha Pyankha, as the ceremony is called, starts with a puja for the Bhimsen — the god of wealth and prosperity, a popular <a href="https://nepalitimes.com/here-now/the-homecoming-of-nepal-s-gods">deity in Patan</a> who has a temple dedicated just to him in the palace square. This is immediately followed by a bhajan of Bhairab performed with <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/Buzz-house,670">traditional Newa musical instruments</a>. Community members serve snacks consisting of samay baji beaten rice, water buffalo chunks, soybean, green veggies, lentils, ginger, garlic and aila liquor. “In the first act of the shadow play, the man initiates the lovemaking, and in the third it is the woman,” says Laxmi Lal Awale, also a member of the trust that organises the show. The shadow action is all uncensored, but interspersed with <a href="https://nepalitimes.com/review/between-the-sacred-and-everyday">scenes of everyday life</a>: the woman is spinning a thread, the king is going about his royal chores, and the two sit down to share sanacha fermented pickle that is popular this time of year. <div class="embed-block"><iframe width="560" height="315" src="https://www.youtube.com/embed/qZ3twuG1wNQ?si=yRfkoC3A-X9cIl8r" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div> “Back then, there was no tv, films or YouTube, and yet we managed to stage the shadow play using our own resourcefulness,” says Baburaja Awale. “It is important to continue the tradition.” The challenge now is to ensure that the<a href="https://nepalitimes.com/opinion/the-reign-of-the-god-of-rain"> younger generation takes over</a>, learning the lyrics of the ancient bhajan. The dafa khala group that performs all over Patan during festivals and religious events is now training teenagers to play the musical instruments and act in the shadow play. The Jhyalcha was staged even after the 2015 earthquake when the falcha where the bhajan is performed collapsed and they made-do in a tin shed. The structure was later rebuilt with a grant from the group, Photo Circle. Lalitpur Metropolitan City sets aside a budget of Rs50,000 to organise the Jhyalcha Pyankha every year, but this is not enough and is supplemented by individual donations. The performers including musicians and actors are all volunteers, and take part in it because it is their community duty. The erotic shadow play was way ahead of its time, not just in its graphic content but the use of contemporary local technology as well as improvisation and pure imagination. Says Laxmi Lal: “Whatever its origin in the legend of King Yog Narendra Malla and his queen, Jhyalcha also served as a medium of <a href="https://nepalitimes.com/here-now/lets-talk-about-it">sex education</a>. In the past, women were discouraged from watching the shadow play, but today everyone is welcome, we all watch it together.” Jhyalcha Pyankha Kwelachhi, Chyasal, Patan 7PM onwards Friday, 5 September

Sex and the city of Patan

This is the 72nd episode of Diaspora Diaries, a Nepali Times series in collaboration with Migration Lab providing a platform to share experiences of living, working and studying abroad. My father ran a store and that is where I spent all my time till Grade 6. Doing my homework. Serving customers. I then moved to my maternal grandparents’ house because I used to get along with my cousin who was a year older than me. We did everything together, and were best friends. We took turns studying: I was a night owl, and he was an early riser. Before I went to bed after studying all night, I woke him up. My mother was 44 when I was born, the same year my eldest brother got married. My sister-in-law becoming a part of our family was how my mother referenced my age. I liked making money, and was always a hustler. In Grade 7, I learnt to handle a tractor and helped my brother-in-law to plough, earning Rs10 a day. As I got better, he paid me more. By Grade 9, I was already making Rs500 per day, but had to slow down to prepare for my exams. From an early age I knew I did not want a 9-5 job. There just wasn’t enough money in it. I wanted to get into business, and compared my brother who worked in the post office and what businessmen made. It did not help that my brother was honest, and never took bribes. A friend and I made money selling cheap Chinese phones at a premium to our friends. We blasted music on the phones and pretended that we were giving them a discount. After SLC, I started teaching math and other subjects. I was soon a shareholder in the same school and in the evening I was involved in our family’s floriculture business, growing amaranth and marigold for garlands.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250831020844_1b54b999d67122a50c4c7e6204cc737bcc99bf2a68db6499a4566a7f61a880b4.jpg" data-media-id="editor_0" data-image-id="20250831020844_1b54b999d67122a50c4c7e6204cc737bcc99bf2a68db6499a4566a7f61a880b4" data-rendition-name="original" width="955" height="1314" loading="lazy" alt="Diaspora Diaries 72"> </figure>  It was then that a friend suggested we learn the Korean language. We could be earning significantly higher in Korea for similar efforts. I had no plans to go abroad but he convinced me. I did not know anything about Korea, and was scolded at the language institute when I asked someone to point Korea on the map.&nbsp; It was only there that I learnt you had to pass an exam for the Korean Employment Permit System (EPS), and pay for language classes. After a week, I decided it was not for me and dropped out. But my friend convinced me to give it one more try. I did not prepare much for the exam, and it was no surprise that I failed. But it was just by one mark, and people would pity me for failing “just by one mark”. It was a brand of failure. It hurt my ego. I had to turn things around by taking the exams seriously, and locked myself up to study hard.&nbsp; Even when we had visitors, my wife told them I was not home. If I was not in my room learning Korean, I would be with a group of ten of us test-takers comparing notes and practicing late into the night. The exam was difficult, but this time I passed, the only one in my group who did.&nbsp; As someone who never liked the idea of doing a job, I still had my doubts about going to Korea. It did not help that one of my acquaintances had returned a month after he had left, and he discouraged me from migrating given that I was already making good money in Nepal.&nbsp; But my wife suggested that I give it a shot since I had worked so hard for it. And if it really turned out not to be my cup of tea, I could always return. What did I have to lose, I thought, at least I would get to visit Korea. My job there was in an electrical company that made circuit boards. I worked all day, earned good money. In the evenings, I kept myself busy with my real estate business back in Nepal. I had learnt the tricks of the trade from fellow real estate agents back home, but at the time did not have the capital to invest.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250831020848_941e961e2045058f255ad89884b51faa7d2365c68236e5cbe573d63d769ac6c5.jpg" data-media-id="editor_1" data-image-id="20250831020848_941e961e2045058f255ad89884b51faa7d2365c68236e5cbe573d63d769ac6c5" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Diaspora Diaries 72"> </figure>  In Korea, it helped that I had salary records that allowed me to get loans from financial institutions both in Korea and in Nepal. Ultimately, I started earning more from my real estate deals in Nepal than from my job in Korea. This was all thanks to my ability to take loans because of the EPS scheme. My wife has been managing the flower business while I was away. My finances grew stronger over the eight years I was in Korea. I paid off the loans that I had borrowed to buy land. But real estate did not satisfy me entirely. I wondered: what is my brand? What will I be known for? What is my contribution to society? Real estate is for wealth, but that is about it. I needed to sell one piece of land and use the revenue to start a venture. I took classes in business, and returned to Nepal six months ago and got back to my family’s ancestral roots in floriculture. In Nepal too, I am continuing the entrepreneurship training I had started in Korea with the Bridge International. Such exposure helps us reflect on our business such as our branding, vision, and proactive aspects like the importance of strong recordkeeping.&nbsp; I am now working to upgrade and expand my floriculture business. With a friend who is still in Korea I am building a cooling room to increase the shelf-life of flowers and other produce and set up a market in my village where others can sell their produce. Floriculture is our primary business, but it is seasonal and earns good money only during festivals like Tihar.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250831020848_a008ffeba13896e6918f68ff6e687c8fe11140d86a96f1ec11690547f2bcd415.jpg" data-media-id="editor_2" data-image-id="20250831020848_a008ffeba13896e6918f68ff6e687c8fe11140d86a96f1ec11690547f2bcd415" data-rendition-name="original" width="1280" height="720" loading="lazy" alt="Diaspora Diaries 72"> </figure>  So, I grow tomatoes to ensure year-round earnings. I also am engaged in other businesses like real estate and online shopping. I work round the clock in Nepal — a strong work ethic is something I picked up in Korea.&nbsp; My Korean bosses would work alongside us, that motivated us. I work just as hard in Nepal as I did in Korea. People here often ask me why I am pushing myself so hard. But making garlands comes easy to me, it is work my forebears were involved in. My childhood memories are about plucking flowers with my sister. I have a comparative advantage in this work. It comes naturally to me, it is easy and I enjoy it. And sometimes, if there are too many garlands to make, I can multitask while holding meetings. My fingers just fly. I am good at this job, but my wife is even better and faster.&nbsp; When there is too much load, we can also outsource the work. To be known as the flower guy would be great personal branding. The मखमली guy. Or the सयपत्री guy. I decided to come home for just this with a one-way ticket. “अब पासा: जाँदैन ल्हासा!” &nbsp;

national-security

A survival strategy for Nepal

Illiberal ills

Protest grows against Nepal’s social media ban

30 years after Baby Arun

Sex and the city of Patan

The flower guy