Catastrophic floods in Nepal's Bhotekoshi and Trishuli valleys have destroyed or damaged 14 hydroelectric projects, knocking out 431 megawatts — over 12 percent of the country's total generating capacity — according to the Nepal Electricity Authority. Including projects under construction, the capacity loss roughly doubles. The disaster killed more than 600 people, left over 2,400 missing, and displaced 93,000 needing assistance. At the Trishuli-1 project, 63 Indians were rescued from a construction tunnel while over 100 workers remain unaccounted for.

The destruction exposes vulnerabilities in Nepal's economic strategy of becoming a major renewable electricity exporter. The country aims to reach 28,500 megawatts by 2035 and recently confirmed a deal to send 10,000 megawatts to India over 10 years. However, Puspa Sharma of the National University of Singapore notes Nepal faces dual risks: worsening climate hazards in mountainous terrain and dependence on India as its essential market and transit route.

India's reluctance to accept Chinese-backed hydropower investments — reinforced by border tensions after the 2020 clash — further complicates development. Nepal has 83 gigawatts of hydropower potential but requires billions in infrastructure investment. With average annual income around $1,600, the landlocked nation's ambitious energy bet faces mounting geological and geopolitical uncertainty.