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Ralph Jennings

China has plans to increase its investments in Nepal to take advantage of the country’s rich hydropower resources, according to a Nepalese official.
Nepal’s hydropower sector is particularly attractive to Chinese investors because there is potential to sell some of the power generated to India, said Hong Kong-based Consul General Bindeswar Prasad Lekhak.
The Himalayan nation, which borders China and India, has vast untapped hydropower resources and it is keen to attract more foreign investment to expand the sector. It is already part of Beijing’s Belt and Road Initiative, which focuses on building infrastructure.
“China is the biggest investor in Nepal, so I think China will support us more and more in the future,” Lekhak said on the sidelines of the Asian Financial Forum in Hong Kong earlier this week.
“They are planning for this year and they have already proposed some projects,” he added. “Maybe in the near-term future they will come up with some new (foreign direct investment) in Nepal.”
China is Nepal’s largest foreign direct investor, and Chinese companies have been involved in the country’s hydropower industry ever since Nepal opened up the sector to private investment in 2010, according to the Nepal Economic Forum, a research institute.
Investors from China contribute to more than one-quarter of Nepal’s hydropower projects, more than any other country, Lekhak said. India is the second-largest foreign investor in the sector, followed by several Western countries, he added.
Nepal’s largest hydroelectric power station – the 546-megawatt (MW) Upper Tamakoshi plant – was built by the Power Construction Corporation of China, with work completed in 2021.
Chinese investors and engineers are also involved in the construction of the 135MW Manang Marsyangdi hydroelectric plant, which broke ground last year.


Nepal already exports some hydropower energy to the more populated India and Bangladesh, which sit at generally lower elevations. Five years ago, India allowed Nepal to begin selling power on the country’s day-ahead market.
Reports suggest there is significant potential for Nepal to ramp up those exports. It is “technically and economically achievable” for the country to increase its hydropower capacity to 43 gigawatts, according to a 2024 study by researchers in Nepal and the United States.
But Nepal has so far only harnessed about 10 per cent of that, mainly due to a lack of investment, the National University of Singapore’s Institute of South Asian Studies found. The country received US$86.15 million of foreign direct investment in the 2024-2025 financial year, according to Nepal Economic Forum data.
India, for its part, cannot meet its energy needs through domestic sources alone. “India could be a market for Nepal,” said Jayant Menon, a visiting senior fellow at the ISEAS – Yusof Ishak Institute in Singapore, citing the country’s huge energy deficit.
But developing hydropower in Nepal comes with risks, including potential water rights disputes, the cost of relocating people who live near project sites, and local opposition to exporting energy at a time when power outages remain common in Nepal, the 2024 study found.
Nepal’s need to maintain a diplomatic balance between China and India – which have had tense relations in recent years – has also created issues for Chinese investors in the past. In 2017, Nepal rescinded a contract with a state-owned Chinese construction group to build a 1,200MW hydropower plant.
The consul general also forecast further Chinese investments in Nepal’s tourism sector, particularly in hotels.
Some 1.5 million tourists visited the country during the 2024-2025 financial year, Nepal News reported. Tourism accounts for an estimated 6-8 per cent of the Nepalese economy.


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China has ‘already proposed some projects’ in Nepal, as it looks to tap the country’s huge hydropower resources and sell power to India


China has ‘already proposed some projects’ in Nepal, as it looks to tap the country’s huge hydropower resources and sell power to India.


China to step up investment in Nepal’s hydropower sector: Nepalese official

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}China has ‘already proposed some projects’ in Nepal, as it looks to tap the country’s huge hydropower resources and sell power to India

China has ‘already proposed some projects’ in Nepal, as it looks to tap the country’s huge hydropower resources and sell power to India