For years, Nepal's hydropower narrative was defined by underutilized potential. That is now changing in visible, measurable ways. Installed generation capacity reached about 3,175 MW by early 2025, nearly four times the 2015 level, with hydropower still accounting for the overwhelming majority of electricity generation. In H1FY26 alone, nearly 385 MW was added to the grid, helping lift electricity generation by 19.7 percent. What was once a question of resource potential is increasingly becoming a question of execution, system capacity, and strategic deployment.
What makes the present moment different is that hydropower is no longer merely addressing a domestic shortage; it is opening a regional market. India approved an additional 280 MW of electricity imports from Nepal in early FY26, bringing the total approved import level to 1,216.7 MW, while Nepal also began exporting 40 MW to Bangladesh through a tripartite arrangement using India's transmission system. This marks an important shift: hydropower is evolving from a national utility story into an export, transmission, and industrial-development story with regional relevance.
Government policy is now beginning to align more explicitly with that opportunity. Nepal's Energy Development Roadmap, 2081 sets out a highly ambitious direction for the sector, targeting 28,500 MW of installed capacity by 2035, 15,000 MW of electricity exports, full electricity access, and a major expansion in transmission lines and substation capacity.
The implication for investors is significant. The next phase of value creation in Nepal's power sector is unlikely to come from generation alone. It will come from financing and building the connected infrastructure that turns energy capacity into reliable, bankable, and exportable power. Transmission, substations, storage, grid balancing, and industrial energy use are becoming as important as generation itself. In that sense, hydropower is not only an energy theme; it is a platform for broader infrastructure formation.
This is why we believe hydropower will anchor Nepal's next infrastructure cycle. It sits at the intersection of energy security, export competitiveness, industrial productivity, and long-duration capital formation. The opportunity is no longer simply to finance dams. It is to back the broader architecture that converts natural resource advantage into strategic economic capability. For disciplined investors, that is where the next decade of infrastructure value in Nepal is most likely to be built.