KATHMANDU, July 9: Energy experts and industry leaders have stressed that electricity should become the main driver of Nepal's economic growth. They said Nepal should not rely only on power exports but also increase domestic consumption by expanding industries and digital infrastructure.
Speaking at the "Power Nepal Conclave 2026," organized by Nepal Republic Media in Kathmandu on Wednesday, participants said Nepal could earn far greater economic returns by using electricity to support productive industries and exporting computing services.
The conclave was held under the theme "Towards a Production-Based Economy Through Electricity Consumption", with the aim of linking Nepal's electricity production to the country's broader development and prosperity. The event brought together the Minister for Energy, India's former energy secretary, government officials, private sector representatives, and energy experts.
Opening the conclave, Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha said Nepal's hydropower sector should be integrated with industrial development, transportation, job creation, and import substitution to build a more prosperous future. Discussions focused on how Nepal could move beyond exporting electricity and instead promote domestic industrial consumption to support a production-driven economy.
Minister Shrestha said the government aims to raise Nepal's annual per capita electricity consumption to 1,500 kilowatt hours by 2030. He noted that current consumption remains very low and said increasing domestic industrial use is essential to meet that target. Nepal's present per capita electricity consumption stands at only 400 to 450 kilowatt hours.
According to the minister, household consumption alone will not be enough to achieve the 2030 target. The government plans to significantly increase electricity demand by connecting large industries, data centers, commercial establishments, and major tourist hotels to the national grid. While expanding domestic consumption remains the government's top priority, Nepal will also continue promoting cross-border electricity trade with neighboring countries.
No shortage of hydropower plans: Anil Swarup
Former Indian Energy Secretary Anil Swarup said Nepal has no shortage of ambitious hydropower and development plans, but administrative delays continue to hinder implementation.
Swarup said success depends less on making plans and more on executing them efficiently. Referring to Nepal and India as democratic countries, he said democracies rarely lack ideas but often struggle with implementation.
He outlined eight conditions for any successful project: it must be politically acceptable, socially necessary, technically feasible, financially viable, administratively practical, legally sound, emotionally connected to people, and environmentally sustainable.
Sharing India's experience, Swarup said, "We introduced a digital file tracking system that showed how long every file remained on each official's desk. It made officials accountable, and within 15 months projects worth five trillion Indian rupees were approved."
He suggested Nepal should fully digitize its government file management system to eliminate bureaucratic delays.
The first session of the conclave focused on using electricity within Nepal instead of exporting it as a raw commodity. Moderated by Samriddhi Gyawali, the panel discussed ways to use electricity to strengthen industries and modern information technology.
Chairman of WorldLink Communications Dileep Agrawal said Nepal should abandon the traditional mindset of simply exporting electricity. He noted that the rapid global expansion of artificial intelligence is driving demand for large data centers.
Two-day Huawei Digital Nepal Conclave 2022
"Nepal's cool climate reduces data center cooling costs by around 15 percent," Agrawal said. "Instead of selling cheap electricity to neighboring countries, Nepal can establish green data centers and export computing power to the world. That could generate hundreds of billions of rupees in revenue."
However, he criticized the government for not recognizing data centers as an industrial sector, preventing them from receiving concessional electricity tariffs.
Senior Vice President of Butwal Power Company Sanjay Krishna Shrestha said increasing electricity production without adequate market demand and appropriate pricing would be a flawed strategy.
He suggested the private sector should currently focus on peaking run-of-the-river hydropower projects, while reservoir-based projects require much larger investments and guaranteed international markets.
Chairman of Pashupati Renewables Dr Sandip Shah said climate change has caused glacier melt, reducing hydropower generation during winter to below 20 percent of installed capacity.
He said Nepal should combine solar and hydropower to meet winter demand, adding that high-altitude regions such as Mustang are highly suitable for solar energy development.
Shah also stressed that Nepal needs stable power purchase agreements and consistent government policies to attract foreign investment. He added that the government should take responsibility for building transmission lines to support the expansion of the hydropower sector.
Govt improving investment climate
Director General of the Department of Industry Jitendra Basnet said the government is pursuing policy reforms to create a more business- and investment-friendly environment.
Basnet said efforts are underway to resolve inconsistencies among various laws while making the one-stop service centre more effective and fully digital through an integrated online system. He also said the government is preparing a new production-based incentive framework and is discussing granting industrial status to service sector businesses, including data centers.
Speaking during the second session of the "Power Nepal Conclave 2026," moderated by Republica Editor Kosh Raj Koirala, policymakers, investors, and experts stressed that Nepal's energy future should be closely linked with economic prosperity and import substitution.
The session, titled "Financing Nepal's Energy Future," highlighted the need to strengthen transmission infrastructure, maintain policy consistency, and mobilize innovative financing alongside hydropower development.
Chief Investment Officer of Mercantile Group of Companies Amod Rajbhandari presented data showing the rapid growth of Nepal's electric vehicle market.
He said Nepal ranks second in the world after Norway in terms of electric vehicle market share.
"Seventy two percent of all vehicles imported into Nepal are electric, which is an extraordinary achievement," Rajbhandari said. "By 2030, the number of electric vehicles is expected to reach between 250,000 and 300,000. They will consume around 450 gigawatt hours of electricity annually while replacing petroleum imports worth around Rs 40 billion every year."
To expand EV infrastructure, he said Mercantile has formed a joint venture called GoECI Mercantile with GoECI Autotech of Kerala to establish at least 100 modern charging hubs across Nepal.
Energy expert and former Deputy Managing Director of Nepal Electricity Authority Prabal Adhikari said adding generation capacity alone cannot be considered a success. The real challenge lies in efficiently utilizing and managing the electricity produced.
He noted that Nepal's power system remains relatively small and technically sensitive.
"The private sector should focus on peaking run-of-the-river and reservoir-based hydropower projects," Adhikari said. "The Nepal Electricity Authority has already signed power purchase agreements for 8,000 megawatts, while another 12,000 megawatts are in the pipeline. Strengthening the transmission grid must now become the top priority."
He also suggested exporting electricity through a Green Corridor mechanism to attract international climate financing and concessional loans.
Private sector should take lead in power generation
Joint Secretary at the Ministry of Energy, Water Resources and Irrigation Sagar Raj Gautam said the government wants the private sector to take the lead in electricity generation and trade while the state focuses on building transmission infrastructure.
He said construction of the new 400 kV Butwal-Gorakhpur cross-border transmission line is in its final stage, with full commercial operation targeted by November 2027.
According to Gautam, the government has adopted a policy of giving high priority to the sanctity of contracts in order to attract foreign investment in hydropower.
He added that the ministry is giving top priority to three major bills: the Water Resources Bill, the new Electricity Bill, and the Renewable Energy Bill to support the overall development of Nepal's energy sector.
Senior Vice President of the Independent Power Producers' Association, Nepal, and energy entrepreneur Uttam Blon Lama said Nepal's hydropower sector has made remarkable progress over the past decade.
"Twelve years ago, Nepal experienced up to 16 hours of daily load shedding, and the World Bank believed the country could not generate even 100 megawatts of electricity using domestic resources," Lama recalled. "Today, Nepali banks, the private sector, and ordinary citizens have together built nearly 3,600 megawatts of generation capacity."
He said investment in Nepal's hydropower sector has reached around 13.5 billion US dollars, with more than six million Nepalis becoming shareholders in hydropower companies.
Lama said future discussions should shift from electricity generation to cross-border power trade and market expansion.
Allow private sector to trade electricity
He urged the government to allow the private sector to participate in electricity trading and introduce an open access policy.
"We need policy support more than budget allocations," he said. "If the government creates a predictable policy environment, foreign investors and Indian banks will come to Nepal on their own. Improving the domestic distribution system could also replace LPG imports worth Rs 50 billion every year."
Founder of Nepal Republic Media Shova Gyawali stressed that Nepal must accelerate economic empowerment alongside good governance and zero tolerance for corruption to achieve sustainable development.
Delivering the welcome remarks, Gyawali described the energy sector as the backbone of the national economy.
Presenting data showing that nearly Rs 1.3 trillion has already been invested in Nepal's hydropower sector, she said the government's target of generating 30,000 megawatts of electricity over the next decade is highly encouraging for the country's economy.
"The generation target is historic in itself," she said. "But today's biggest challenge is to build a strong ecosystem that ensures the electricity produced is consumed everywhere, from household kitchens to large industries."
She said Nepal Republic Media had brought together national and international stakeholders in the energy sector to initiate meaningful dialogue and expressed confidence that the conclave would generate practical and impactful solutions to Nepal's policy and implementation challenges.
The energy conference was supported by several leading institutions, including Citizens Bank International, Butwal Power Company, Data World, and Jyoti Bikas Bank, which participated as flagship partners in different categories.
