The government has estimated that an investment of US$ 46.5 billion (Rs 6,400 billion) will be required to achieve the target of generating 28,500 megawatts (MW) of electricity by 2035 under the Energy Development Roadmap 2081. However, government officials acknowledge the challenge of raising this capital, given the government’s current annual capital expenditure of just Rs 200 billion.

While domestic private sector investment in the energy sector is increasing, contributions from the government and foreign sources remain limited. The Ministry of Energy, Water Resources, and Irrigation, outlined this ambitious investment target while releasing the Energy Development Roadmap 2081 on Thursday.

Energy Minister Deepak Khadka emphasized that while managing the required investment is challenging, it is achievable. “The ministry has adopted a scientific approach to achieve this goal, and we are collaborating with domestic and foreign private sectors, banks, financial institutions, the Nepal Bankers Association, Nepal Rastra Bank, and the Ministry of Finance,” he said.

Prabal Adhikari, a senior energy expert at the ministry, admitted that the production and investment goals are ambitious. “There are doubts about whether we can secure the necessary investment and achieve the production targets. However, ambitious long-term plans are essential, and the goals are not impossible,” he said.

The roadmap outlines that the required investment will be managed through several sources. This includes US$ 6 billion from the Government of Nepal, US$ 10 billion from internal sources such as private sector investments and banks, US$ 2 billion from climate financing, US$ 12 billion from Nepalis living abroad and Nepali migrant workers involved in foreign employment, US$ 8.5 billion from foreign investment, grants, and loans, and US$ 8 billion through the Nepal Electricity Authority (NEA).

To attract investments, the government plans to issue financial instruments such as energy bonds and debentures through agencies like the Hydroelectricity Investment and Development Company (HIDCL) and the Nepal Infrastructure Bank (NIFRA). These measures are expected to mobilize approximately US$ 1 billion annually, generating around US$ 12 billion over the next decade.

Ganesh Karki, president of the Independent Power Producers Association of Nepal (IPPAN), described the roadmap as a historic milestone. He said private sector investors are ready to contribute, provided the government undertakes administrative and policy reforms to ensure a secure investment environment. “The required investment will not be needed immediately but incrementally over a decade. This phased approach makes the target manageable,” Karki explained.

The NEA has already signed power purchase agreements (PPA) for projects totaling 11,168 MW. Additionally, projects worth 12,968 MW are awaiting PPAs, while 3,700 MW are under various stages of construction with the involvement of the Indian government and Indian companies.

The roadmap projects that 15,000 MW of electricity will be exported, with 10,000 MW going to India and the remaining 5,000 MW distributed between Bangladesh and China.

Karki noted that, excluding government-priority projects, the total capacity from ongoing and planned initiatives already aligns with the roadmap’s target of 28,500 MW. “If investment is successfully mobilized, achieving this production target is realistic,” he said.