Governance, not engineering, holds back Budhigandaki Hydropower Project

Leadership instability, sequencing failure, and weak institutional trust—not engineering constraints—continue to delay Nepal’s most important storage hydropower project. Despite decades of political attention, the Budhigandaki Hydropower Project remains unimplemented. Recent government decisions to pursue implementation through a high-level authority rather than the previous company-based structure indicate continued efforts to find an effective institutional model.

Yet the core issue remains unchanged: not design or resource uncertainty, but governance fragmentation, weak execution systems, and the inability to sustain institutional continuity. Compensation and resettlement challenges also remain unresolved. Lessons from global projects such as Rogun Dam of Tajikistan and the Nam Theun 2 of Laos highlight a consistent truth: financing and construction follow governance credibility, not the other way around.