Blog · Nepal Development: Roads, Hydro and EVs

Nepal Hydropower Explained: Big Projects, Electricity Exports, and Why Power Cuts Still Happen

By Saurav Sharma · 2026-11-02

This guide explains Nepal's electricity story for Nepalis living in the US. You will hear two things from home that sound like they cannot both be true: Nepal is selling power to India and Bangladesh, and the lights still go out. Both are true. Here is why, with the numbers.

Short answer:

  • Exports: Nepal earned Rs 29.32 billion (about $193 million) from electricity sales in FY 2025/26, a record.
  • Imports: it still bought Rs 10.55 billion of power, mostly in winter.
  • Why: most plants run on river flow. In the dry season, Nepal expects to generate only about a third of its installed capacity.

The big projects

Status uses three words only: Announced (planned or financed on paper, main works not started), Under construction, and Open to the public (producing power for the grid).

ProjectCapacityStatusLatest fact (date)Source
Upper Tamakoshi (Dolakha)456 MWOpen to the publicGeneration stopped for about 10 hours to clean the reservoir after floods (Aug 2026)Ekantipur, Aug 9, 2026
Arun-3 (Sankhuwasabha)900 MWUnder construction74.61% physical progress; cost estimate Rs 144 billion; Nepal gets 197 MW (21.9%) free (Jan 2026)Ekantipur, Jan 26, 2026
Upper Arun (Sankhuwasabha)1,063 MWAnnouncedPlan to build with 70% debt and 30% equity from domestic sources, led by the electricity authority (Dec 2025)Ekantipur, Dec 5, 2025
Budhi Gandaki (Gorkha and Dhading)1,200 MWAnnouncedBids invited for a camp and a bridge, the first pre-construction works (Apr 2026)Ekantipur, Apr 13, 2026

For scale: the 2026 dry-season plan puts Nepal's installed capacity at 3,739 MW, with another 320 MW expected by mid-December 2026. Arun-3's 900 MW equals about a quarter of today's installed total.

Electricity exports and earnings

FY 2025/26 (mid-July 2025 to mid-July 2026)NPRAbout USD
Export earningsRs 29.32 billion$193 million
Same figure, FY 2024/25Rs 17.45 billion$115 million
Import billRs 10.55 billion$69 million
Net surplusRs 18.76 billion$123 million
Of exports, sold to BangladeshRs 1.06 billion$7 million

USD figures use the Nepal Rastra Bank rate of NPR 152.23 per USD (November 2, 2026). The FY 2024/25 figure converts at the same rate, so it only shows scale.

  • India buys almost all of it. The electricity authority said Nepal was exporting about 1,000 MW on average in July 2026.
  • Bangladesh buys 40 MW from June 15 to November 15 each year, at 6.40 US cents per unit, through India's grid. The August 26, 2026 Bhotekoshi flood damaged the plants assigned to this deal. Exports restarted on October 23, 2026 from two other plants, Solu Khola and Kabeli B1.

Why exports and power cuts happen in the same country

  1. Rivers rise and fall. Most Nepali plants are run-of-river: no big reservoir, so output follows the river. In the monsoon there is more power than Nepal can use, so it sells. In winter the rivers drop.
  2. The winter gap is large. For mid-December 2026 to mid-May 2027, the electricity authority estimates domestic generation of about 1,218 MW, roughly 30% of installed and upcoming capacity. Average peak demand last fiscal year was 2,292 MW and grows about 10% a year.
  3. So Nepal imports in winter. The plan is to import up to about 1,155 MW from India this dry season, more than the 600 to 700 MW of past years, because of flood damage.
  4. Floods hit plants and lines. After the 2026 floods, about 430 MW was cut off in the Trishuli corridor alone, and damage to the authority and its companies was estimated at Rs 74 billion. In late September, about 230 MW was still off the grid and places like Mustang, Manang, Pyuthan and Rolpa were still being restored.

A cut at your parents' house can also be local: a damaged line or transformer, not a national shortage. Big export numbers in July do not mean steady power in January.

What this means for you, from the US

  • Visiting in winter? December to May is the tight season. Ask family if their area has had cuts and charge devices when you can.
  • Helping family buy an electric car? Home charging is cheap, but winter supply is the weak point. Our EV cost guide has the charging tariffs.
  • Investing? Many hydropower companies raise money through IPOs. The rules for buying from abroad are in how to buy Nepal IPOs from the US. This page is not investment advice.
  • Roads to the dams: the same highways carry project traffic. See the Nepal megaprojects tracker.

Sources

FAQ

How much money does Nepal make from selling electricity?

Rs 29.32 billion in fiscal year 2025/26 (mid-July 2025 to mid-July 2026), up from Rs 17.45 billion the year before, according to the Kathmandu Post. That is about $193 million at the November 2, 2026 Nepal Rastra Bank rate. After paying Rs 10.55 billion for imports, the net surplus was Rs 18.76 billion.

Does Nepal sell electricity to Bangladesh?

Yes, 40 MW from June 15 to November 15 each year under a five-year deal signed in October 2024. The power goes through India's grid. Exports stopped after the August 26, 2026 flood and resumed on October 23, 2026.

If Nepal exports electricity, why are there still power cuts?

Most Nepali plants run on river flow, and rivers drop in winter. For the December 2026 to May 2027 dry season, the electricity authority expects only about 1,218 MW of domestic generation from 3,739 MW of installed capacity, against a peak demand of about 2,292 MW last year. So Nepal exports in the monsoon and imports in winter. Floods in 2026 also damaged plants and lines.

What are the biggest hydropower projects in Nepal?

Upper Tamakoshi, at 456 MW, is one of the largest plants running. Arun-3 (900 MW) is under construction, and Upper Arun (1,063 MW) and Budhi Gandaki (1,200 MW) are larger but not yet under main construction.

When will Arun-3 be finished?

No firm date has been published that I could confirm. Physical progress was 74.61% in January 2026, according to Ekantipur. Nepal gets 21.9% of its power, or 197 MW, free.

Can I invest in Nepal hydropower from the US?

Many hydropower companies sell shares through IPOs on the Nepal Stock Exchange. Whether you can apply from the US depends on the rules for Non-Resident Nepalis. See our guide on buying Nepal IPOs from the US.

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