The future of hydropower projects with a combined capacity of 40,000 MW is in jeopardy following the decision of the Supreme Court's Constitutional Bench to nullify an amendment to the law permitting the operation of national priority projects within national parks, reserves, and conservation areas, according to the Independent Power Producers Association of Nepal (IPPAN).
The government had amended the National Parks and Wildlife Conservation Act, 2029, via an ordinance ahead of the Third Investment Summit in late April last year. This amendment allowed projects of national importance, approved by the Investment Board of Nepal or designated as projects of national pride, to operate in conservation areas while maintaining harmony between nature and humans. The ordinance, later passed by parliament, was aimed at encouraging investment in energy and infrastructure development.
However, a writ petition filed by Advocate Dilraj Khanal challenged the amendment. On January 15, the Supreme Court declared the amendment unconstitutional, halting activities under the revised provisions. This decision has raised concerns over its impact on hydropower projects located within conservation areas.
At a press conference held in Kathmandu, IPPAN revealed that Rs 30 billion has already been invested in 267 projects with a combined capacity of 19,736 MW located in national parks and reserves. "The future of an additional 20,000 MW worth of projects still under study in these areas remains uncertain," IPPAN stated.
IPPAN President Ganesh Karki expressed grave concerns over the decision, noting its implications for private sector and public investments. He warned that this could derail the government's ambitious energy development roadmap, which envisions generating 28,500 MW of electricity by 2035, including consumption of13,000 MW domestically and exporting 15,000 MW internationally.
"If the amendment to the National Parks and Wildlife Conservation Act, 2029, is not reinstated, it will severely affect the country’s energy development goals," Karki said.
The government had introduced the "Bill to Amend Some Nepal Acts 2081 for Investment Facilitation" ahead of the Investment Summit. The bill aimed to create an investment-friendly environment by amending various laws, including the National Parks and Wildlife Conservation Act. However, the Supreme Court’s ruling has disrupted work on several projects, leaving the share investments of six million people uncertain, according to IPPAN.
IPPAN General Secretary Balram Khatiwada added that the target of generating 28,500 MW of electricity within the next decade is unfeasible unless hydropower projects within protected areas are allowed to proceed without legal or procedural hindrances.
Notable projects impacted by the ruling include Upper Tamakoshi, Khare, Sipring Khola, Khanikhola, Singati, Upper Chaku A, Chaku Khola, Bhotekoshi-1, Balefi A, Indrawati, Nilgiri-1, Nilgiri-2, Langtang, Chilime, Rasuwagadhi, Sardi Khola, Khimti Khola, Upallo Khimti, Sikles, Midim Khola, Bhujung, and Supermadi, among others.
According to IPPAN, while dozens of projects have already been completed, hundreds remain under construction. Many have received Environmental Impact Assessment (EIA) approval and await preparations for construction and land tenure rights, while others are still undergoing EIA studies.