NICCI pushes for hydropower reforms; Minister Shrestha pledges evidence-based policy overhaul

KATHMANDU: Nepal-India Chamber of Commerce and Industry (NICCI) has called for sweeping reforms in Nepal’s hydropower sector, proposing a shift in policy priorities and stronger energy cooperation with India. Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha reverted that the government is ready to address long-standing challenges through evidence-based policy adjustments.

During a courtesy meeting with the Energy Minister today, NICCI presented its proposals, urging the government to adopt investment-friendly policies, simplify approval processes, and enhance coordination among relevant agencies. It stated that such measures would help harness Nepal’s vast hydropower potential and accelerate cross-border electricity trade.

NICCI President Sunil KC said reforms are essential to restore investor confidence. “Without a predictable regulatory environment, Indian investment will not come to Nepal,” he said, noting that very little Indian investment has entered Nepal over the past two decades. “If we are serious about expanding hydropower and attracting Indian investment, Nepal must adopt a practical and investor-friendly approach.”

NICCI stressed the need for a strategic shift from the traditional “generation-first” model to one that prioritizes power trading and transmission infrastructure alongside generation. It also proposed forming a joint working group involving the Ministry of Energy, Department of Electricity Development, NICCI, and the Ministry of Law to address legal and regulatory hurdles faced by investors.To further strengthen bilateral cooperation, NICCI proposed organizing a ‘Nepal–India Energy Forum’ in New Delhi, with both governments acting as facilitators while allowing the private sector to lead investments. Minister Shrestha responded positively to the proposal and agreed to further coordination with NICCI.

The chamber highlighted challenges related to forest clearances, land acquisition, and local-level approvals, urging the Energy Ministry to strengthen its coordinating role. It also called for the immediate issuance of long-pending electricity trading licenses and the inclusion of ‘take-or-pay’ provisions in power purchase agreements.

Responding to the proposals, Minister Shrestha acknowledged the concerns of the private sector and reaffirmed the government’s commitment to reforms. “We are positive about these demands and will work closely with NICCI and the private sector to remove bottlenecks and attract more Indian investment into Nepal’s energy sector,” he said.

The minister said a new electricity policy is in the pipeline and invited the private sector to provide suggestions with a clear implementation checklist. He stressed the need to align Nepal’s policies with state-level frameworks in India, which remains Nepal’s primary energy market. He also emphasized a participatory model with clearly defined roles for both government and private sector to ensure energy security.Highlighting the need to correct inefficiencies and “wrong practices” in both public and private sectors, Minister Shrestha proposed creating a broader stakeholder mechanism to improve governance and accountability.

NICCI reiterated that both Nepal and India must play a facilitative role in promoting energy cooperation, while ensuring that the private sector remains at the forefront of investment and project development.
The chamber noted that as Nepal aims to expand its hydropower capacity and strengthen energy trade with India, policy clarity and infrastructure development have become more important than ever.

The delegation was accompanied by NICCI Vice President Kunal Kayal and included Executive Members Batu Lamichhane, Ramesh Sharma, and Uttam Bhlon; Managing Director of Nepal SBI Bank, Ram Kumar Tiwari; NICCI Director General Keshab Man Singh; Director Marshal Rathour; Finance Head Mr. Nimesh Nepal; and Program Consultant Mr. Kuber Chalise.