Can Nepal Meet Its 28,500 MW Power Ambition by 2035 Without Unlocking PPAs?
Nepal’s plan to generate 28,500 MW of electricity by 2035 faces major hurdles, with stalled PPAs and financing gaps raising doubts.
Nepal’s ambitious roadmap to generate 28,500 megawatts of electricity by 2035 is increasingly under scrutiny as stalled power purchase agreements (PPAs) and financing hurdles threaten progress.
According to the government’s Energy Development Roadmap 2081, nearly 4,000 MW worth of projects are under construction, with an additional 2,000 MW pipeline involving 84 private-sector hydropower projects awaiting PPA clearance. Beyond that, over 240 projects totaling 11,000 MW remain stuck without signed PPAs despite long-pending applications.
Private developers argue that delays in PPAs not only undermine investor confidence but also obstruct bank financing. Although the government corrected the controversial “take-and-pay” clause in the budget, lingering uncertainty continues to deter lenders.
Meeting the target will also require massive financing of NPR 6.1 trillion (approx. USD 45 billion). Domestic institutions can contribute an estimated NPR 2 trillion, leaving a large gap that must be filled through foreign direct investment and development partners. However, appetite from international investors in Nepal’s hydropower sector remains limited, compounding the challenge.
Industry bodies such as the Independent Power Producers’ Association of Nepal (IPPAN) warn that without immediate approval of pending PPAs, the roadmap risks derailing. “Stopping PPAs while setting a 28,500 MW goal is contradictory. The government must unlock agreements if it is serious,” said IPPAN President Ganesh Karki.
Experts also highlight bottlenecks in transmission and distribution infrastructure, which they argue could cap actual generation at only 11,000–12,000 MW within the next decade. “The target is highly ambitious. Without parallel investment in grids, even half the planned capacity may not materialize,” said Surya Adhikari, Chair of Green Energy Nepal.
Still, the Ministry of Energy insists the target is achievable, with Energy Minister Deepak Khadka reiterating the government’s commitment to implementing the roadmap through phased reforms.