As Nepal’s frustrated power sector gains momentum with the government approval of plans for an Indian company to build the Himalayan country’s largest hydropower project, concerns about the environmental and social impacts of dams – once top of the civil society agenda – are at their lowest ebb.

Nepal’s government has agreed to allow Indian company GMR Energy to construct the US$1.4 billion Upper Karnali dam in the country’s north-west. The project has been delayed since 2008 by political instability and Nepal’s demands for greater benefits from a scheme that is mainly aimed at exporting electricity to India.

The lack of public opposition to large dams is in sharp contrast to the mid-1990s when the World Bank was forced to withdraw its support for the 500-megwatt Arun III hydro project under enormous civil society pressure.

“After the Arun III failure environmental activists were blindly tagged as ‘anti-development’ and nobody wants to bear that tag while the country is facing more than 16 hours of power cuts every day,” said Ratan Bhandari, a prominent community rights activist on rivers.

Nepal currently produces less than 700 megawatts of electricity but demand is more than double that. Many people in Nepal blame environmental activists for the present energy crisis; the Arun dam would have been the country’s largest power project if constructed.

“Powerful international organisations fuelled the anti-Arun movement resulting into huge losses for a poor nation. But now even ordinary citizens think that power is the backbone of the nation’s development,” said Dr Hum Bahadur Gurung, a sustainable development activist. “There are ways to mitigate environmental degradation due to dams and so this shouldn’t halt development as it happened in the past,” he added.

Since Indian prime minister Narendra Modi’s visit to Nepal in August, the debate has centered around the details of the agreement for the Upper Karnali project, which will produce 900 megawatts of power (more than the country’s current total energy production).

The two countries signed a power trade agreement in New Delhi in early September this year, paving the way for building cross-border transmission lines for commercial exchange of electricity between the two countries.

But the power development agreement of the Upper Karnali project was delayed because of concerns Nepal was not getting a good enough deal.

The revised agreement, approved by Nepal’s cabinet on Thursday, ensures Nepal a 27% free equity share in the project and 12% free energy and gives GMR a tax exemption of Rs 5 million (about US$50,000) per megawatt.

Some political parties, especially the Maoists, are still demanding the government scrap the deal with GMR and construct the project itself to consume the energy domestically. “Public debates are more political and emphasise the economic benefits, but if projects don’t benefit locals directly then there is no point happily counting the megawatts,” added Ratan Bhandari.

Many ordinary people are also fed up with water politics as their lives have been hit by the power crisis. Santosh Paudel owns a motorbike workshop in the Bisalnagar district of Kathmandu. He’s more interested in the cost of energy than national and international debates. “I have to halt services for hours every day due to the electricity crisis and I can’t afford a diesel generator as it would increase my cost by at least 20%,” said Paudel.

Muted opposition

There are still a few activists demanding Nepal’s rivers run free. Megh Ale, chairman of the Nepal River Conservation Trust argues some rivers should be left dam-free for various proposes, including adventure tourism.  “I am not against hydropower development but a river is not only about electricity, it has multiple uses and sustainable river development should be a focus,” said Ale. “Unfortunately those who raise this issue have been totally ignored.”

Nepal’s Ministry of Energy claims it has received 82 applications from foreign and domestic companies requesting generation licenses for more than 5000-megawatts of projects. It has also approved more than 500 survey licenses, with many more waiting for approval.

The government is also in talks with China’s Three Gorges International Corporation to build a 750-megawatt dam on the West Seti River close to the Upper Karnali dam, as China and India compete for influence in Nepal.

Former environment minister Ganesh Shah says there is no option but to develop hydropower, but environmental issues shouldn’t be taken for granted. “Peoples’ lives have been so uncomfortable, economic growth is very low and the unemployment rate is increasing. Political leaders now believe hydropower development can bring prosperity. However, environmental concerns should be addressed where possible,” said Shah.

Disinterest among the youth

With the recent developments in Nepal’s energy sector, young activists are no longer interested in river campaigns. Many believe that hydropower should be a government priority.

“We focus on climate change, deforestation and pollution, but dam and hydropower issues are not our current interest,” said Sanot Adhikari, a young campaigner and chairman of the Youth Alliance for Environment—a network of young environmental campaigners.  He said it’s frustrating to see so much talk about hydropower development but little progress generating electricity.

But many activists like Ratan Bhandari believe issues that affect communities should be the priority and hydropower projects should help improve the livelihoods of local people rather than generate revenue by exporting power to India.

“We can’t say no to dams as western activists and organisations have lobbied for, but we have no plans to use the electricity generated and the export oriented mentality won’t bring prosperity to us,” added Bhandari.



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