Analysis: India and Nepal overlooking environmental issues while signing hydropower deals

Nepal is sacrificing its ecology and neglecting domestic priorities to build economic ties with India, says Ramesh Bhushal
<p>Nepal has ambitions to further exploit its hydropower potential, already in evidence in places like the Upper Marsyangdi A Hydroelectric Station in Lamjung, west Nepal (Image: Bishnu Bidari / Alamy)</p>

Nepal has ambitions to further exploit its hydropower potential, already in evidence in places like the Upper Marsyangdi A Hydroelectric Station in Lamjung, west Nepal (Image: Bishnu Bidari / Alamy)

This June, monsoon rains wreaked havoc in Nepal’s hilly regions, but the country’s southern lowlands were instead reeling from a severe lack of water. Tube wells dried out in several parts of Parsa district, in a drought shared by regions over the border in India.

The southernmost foothills of the Himalayas – known as the Churia Range where they lie in Nepal, and Siwalik in India – face serious environmental problems due to soil erosion, deforestation and rapid population growth. In addition, shifting rainfall patterns caused by climate change have led to severe water crises in several areas.

However, experts say this transboundary water crisis is absent from the political agenda.

By late July, the journalist Chandra Kishore was lamenting the crisis from Birgunj, a border town with India’s Bihar state: “I have consistently raised the issue of Churia-Siwalik range degradation that has resulted into water crisis in the southern plains … It is our collective failure to bring this discussion to the forefront and it is a missing issue in our bilateral relations.”

Talking to The Third Pole, Chandra Kishore expresses his frustration that these important issues never seem to be on the national agenda in India or Nepal – much less the countries’ conversations with each other: “Kathmandu listens a bit but doesn’t act, [since] the leadership is [too] busy dealing with India on how to stay in power.” Furthermore, Bihar is currently governed by a party that opposes India’s federal coalition parties. According to Chandra Kishore, “Bihar’s voice rarely reaches Delhi.”

Chandra Kishore’s frustration speaks to a wider failure by the Nepali government to prioritise domestic problems – from changing water cycles and ecological destruction to inadequate electricity grids – if they complicate or threaten economic ties with India.

Official silence on climate change

India and Nepal share multiple rivers that flow from the Himalayas, each central to the lives and livelihoods of millions of citizens – and each vulnerable to the impacts of climate change. In particular, the Ganga River Basin (Asia’s most populous) lies mainly within India and Nepal and is beset with water-management issues, including poor river conservation, a lack of research on water resources and insufficient groundwater recharge.

Despite these factors, high-profile intergovernmental discussions between India and Nepal usually overlook climate change. In 2014, the countries jointly issued a 35-point press release on Narendra Modi’s first prime ministerial visit to Nepal that did not mention climate change. During the intervening 14 such visits between the two nations, climate change has never been officially discussed.

To India, climate change is a foreign agenda and for Nepal, it’s something to talk about to be nice
Dipak Gyawali, former Nepali Water Resources Minister

Rather than talking about the various vulnerabilities of their shared rivers, India and Nepal use these meetings to explore the potential of hydropower. This is unsurprising, given that hydro represents approximately 96% of Nepal’s installed electricity capacity. During Nepali prime minister Pushpa Kamal Dahal’s visit to India in June, a long-term energy trade agreement was finalised: Modi confirmed in a joint press conference that “India will import 10,000 megawatts of electricity in the next decade.” The only point relating to water was a brief mention of flood control.

Meanwhile, several transboundary projects, ranging from railways to petroleum pipelines, were inaugurated in June. These included the second construction phase of South Asia’s first transnational petroleum pipeline, the Motihari-Amlekhganj.

Nepal’s former water resources minister, Dipak Gyawali, tells The Third Pole: “To India, climate change is a foreign agenda and for Nepal, it’s something to talk about to be nice, especially with western countries.”

Power distribution problems

While Nepal emphasises delivering hydroelectricity for India, some of its own people are yet to receive an adequate supply. At a tea stall in Bhaisepati, a southern neighbourhood of the Kathmandu Valley in central Nepal, one tea maker (who wished to remain anonymous) spoke to The Third Pole: “It’s hard to rely on an electric stove … I don’t understand why there are frequent power cuts.”

This was in late July, when the monsoon rains were in full swing, and rivers were swollen – good conditions for generating hydropower. Speaking to The Third Pole, Nepal Electricity Authority (NEA) spokesperson Suresh Bahadur Bhattarai says current installed hydropower capacity and generation in Nepal are approximately 2,800 megawatts (MW) and 2,100MW respectively, while peak demand is approximately 1,800MW. In other words, power should be available. However, Nepal has distribution issues.

 Koshi River Barrage
India-Nepal agreements on transboundary river issues such as the Koshi river barrage, built in 1958, have not incorporated environment nor climate change issues (Image: Alamy)

The Third Pole spoke to the Nepal Electricity Authority’s former managing director, Mukesh Kafle: “There has been too much focus on energy production, but construction of transmission lines and improvement of the distribution system hasn’t happened in the same way. As a result, several hydro projects haven’t been able to dispatch generated energy to the grid and, with increasing demand, local distributions systems aren’t able to handle the load.” This causes frequent power cuts.

As the developer of a Nepali hydropower project in the western Lamjung district, Ganesh Karki is all too familiar with this issue: “We have a 54MW project called Super Dordi in the Dordi River – a tributary of the Marsyangdi – but currently we are dispatching only 10MW. If we had a transmission line, it could run at full capacity.”

Bhattarai agrees with this assessment: “Our distribution network doesn’t have capacity to carry electricity to fulfil demand in several places, which has resulted in frequent tripping.”

Bhattarai blames the time-consuming nature of attempting to clear land and forests to lay the necessary transmission lines; affected villagers may create obstructions and there is a lack of political cooperation. “It’s going to be worse in future if things remain the same,” he adds.

Energy for India

Nepali hydropower developers are therefore excited at the prospect of selling energy to India. “It’s not easy to increase domestic demand immediately, so India is the only market we have,” says Karki.

As of 28 June 2023, Nepal’s Department of Electricity Development had 241 construction licenses issued for hydropower projects with a capacity of 1MW or more, representing more than 8,820MW in total. In addition, hydropower construction applications awaiting approval amounted to more than 8,680MW.

Meanwhile, the Ministry of Water Resources, Energy and Irrigation told The Third Pole it is working on a national 10-year hydropower plan. The ministry is not yet ready to share details.

The current madness will be costly
Megh Ale, president of the Nepal River Conservation Trust

Not everybody is as excited about selling electricity to India as Nepal’s private developers. Gyawali thinks such interest in Nepali hydropower is being driven not by market forces, but by the Indian government’s wish to exercise strategic control over Nepal.

India only imports Nepali hydroelectricity that has resulted from Indian investment and has replaced China as Nepal’s principal hydro investor. India is now funding the construction of projects representing 4,000MW and a further 1,100MW was signed off by Dahal and Modi in June.

Electricity versus ecology

River conservationists are also worried about the domestic costs of developing hydroelectricity for India.

Megh Ale, president of the Nepal River Conservation Trust, tells The Third Pole: “Imagine what will happen to these rivers if you just think about electricity. In the last two decades, we have dammed almost all our major river systems except Karnali. We should also think about ecology and ecosystems while not undermining the need for electricity. The current madness will be costly.”

Ale’s sentiments are echoed by Gyawali: “We should develop less projects and use it for domestic purposes.”

Several studies have warned that Nepal’s dams have already impacted aquatic biodiversity. A study by the Asian Development Bank in 2018 says: “Damming of rivers has had huge environmental costs with serious and irreversible impacts, including the rapid decline in the population of many fish species.”

Policies that predate climate change

Basanta Raj Adhikari, the director of Tribhuvan University’s Centre for Disaster Studies, tells The Third Pole that India’s increasing investment in Nepali hydropower is reason enough to focus on climate change: “It’s going to impact India’s own investment. Extreme rainfall in June in the hills of eastern Nepal washed away several hydro projects.”

“It’s basically an underestimation of the scale of the problem,” says Ajaya Dixit, an advisor at the Institute for Social and Environmental Transition.

In April, the institute released a report on the transboundary rivers that originate in the Churia Range. It highlights that the various Nepali-Indian agreements governing these rivers are as much as 100 years old: “The treaties’ provisions do not cover sustainable water management, promote participation, or recognize emerging risks.”

There is a significant amount of information regarding the impact of climate change on Nepal’s rivers. According to a June 2023 study by the International Centre for Integrated Mountain Development in Kathmandu, “availability of water in the [Hindu Kush Himalaya] is expected to peak in mid-century, driven by accelerated glacial melt, after which it is projected to decline.”

Unfortunately, it seems there is little consideration of these environmental projections among policymakers.